2-2-06

This is the third installment of my series on personal finances and trying to get you in better shape.

In this article, I am going to take for granted that you have decided to right your financial ship and you have decided what you want to do.

Next, you will need to come up with some goals as far as short term (within one year) medium term (one to three years) and long term (over three years).

You should put this in writing and place it somewhere you will see it often. If your goals change, go ahead and change them out on your sheet.

What you will need to do after this is track your spending for a month. Whatever you spend money on, put it on a spreadsheet under whichever category it fits under.

You will wind up with several categories. It isn't necessary to have 100 different categories. You can have one, for instance, such as food, entertainment, utilities, etc.

On something you have every month, such as water, gas, electric, it would be a good idea to pull out your bank statements for the past year and figure out an average.

You should also start working on a budget, but I will touch on that subject more in a later blog.

After you have tracked your expenses for a month, you should examine your expenses and see which items can be eliminated.

The money you spent on these items is what you will use as extra income to pay on your debt.

Tomorrow, I will give some tips on how to attack your debt.