The Symptoms of an Unhealthy Budget: Part Two

22 Jun

Part Two: Can I get myself out of financial trouble?

If you read my last post you found a list of questions to help you determine if you are in financial trouble. I know the discovery of an unhealthy budget is sometimes overwhelming. You thought that living day-to-day was going to be temporary, or you could catch up on the overdue mortgage or rent when your tax refund check came in. Maybe the overtime you were promised at work never came through. What usually happens when you plan on spending any lump sum of money to catch up on past due bills is the need to spend it on unexpected, unavoidable expenses—even emergencies.

When you don’t have enough money for the essentials, you invariably need to spend even more. It never fails–and as times goes on the snowball continues to grow!

Don’t worry—your situation is not a lost cause. Many before you have survived and found a way out of tough financial situations, and you will too. I know it. Now that you know the truth, or are facing the truth honestly for the first time, you can take preliminary steps to begin to work out the details.

You probably have an unopened pile of mail hidden away or tucked into a drawer, maybe shoved into your purse so your spouse won’t find it. Out of sight, out of mind only works for the short term—and your spouse will eventually find what you have hidden. What I want you to do today is dig out that stack of mail and begin the process of opening it, then sorting the most important pieces down to the least important, and touching each envelope only once.

Get rid of the junk mail first. It serves no purpose, and is only taking up valuable space in your house. Clutter can make your mind feel overwhelmed. Start with the easiest task that also makes the biggest overall impact to your stack of envelopes. If you can still see over the pile once you’ve thrown away the junk mail, all is not lost!

Once you have shredded the pesky junk mail and thrown it away, it is time to sort through the real envelopes. You may have your own system, but be sure you check each of them one at a time. Make a pile for regular monthly bills (mortgage, rent, utilities, etc.), credit card mail (bills and notices from collection agencies), medical and health insurance mail (insurance premiums, bills and statements), and then miscellaneous mail–any envelopes that don’t fit into any of the first three categories.

After you have gone through each piece of mail you will have a clearer picture of the obligations you face. Some are re-occurring each and every month, but you only receive others once in a while or infrequently. You must now keep these piles separate, and add new mail to the correct pile as it comes in. Find an inexpensive way to store these documents, such as an accordion file or alphabetical folder, until I tell you what to do with them next. It is too soon to throw away any important statements or copies of pay stubs. You may need these later, even if it turns out that some are duplicates.

Stay with me for the next few days and we’ll work through this difficult process. Read Part Three of: The Symptoms of an Unhealthy Budget. We will tackle the piles together–one day at a time–to improve the overall health of your household budget.

All my best!

Betty Anne



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