You’ll specifically use this article in Step 2 of The 9 Steps to Financial Freedom. However, it’s beneficial to review it in all steps.
Remember back in high school when your finances were easy?
You didn’t have any financial obligations (i.e. bills). It was typical to just get a part-time job, collect a small paycheck and blow the money on whatever your heart desired. Your financial life was good.
Now, we live in a world where dozens of fixed expenses are the norm. You have a mortgage (maybe two) to pay, a cell phone bill, daycare, credit cards, SUV payments … I think you get the point.
You know what else? All of these things are due at different times and it can get quite confusing.
Do you ever find yourself checking your balance to make sure you have enough money to make the payment?
Are you neglecting your electricity payment to make sure the mortgage gets paid?
These types of financial behaviors can be stressful and sometimes financially crippling. A simple way to get these expenses under control is to set up a calendar listing when they are due.
Creating a Personal Finance Calendar
Grab yourself a blank financial calendar (PDF Download) and fill in the dates for the current month.
Once you have that completed, put all of the incoming paydays on it for your entire household and include the amount that’s coming in. You can write it in green or put a “+” beside it.
Next, go through all of your bank and credit card statements to see when certain expenses are due. Ideally and assuming that they apply to your situation, you should have the following expenses on your calendar:
- Mortgage or rent
- All utilities (electricity, cable, etc.)
- Credit card payments
- Other loan payments (car, personal loan, student loans, etc.)
- Insurance payments
- Any other recurring expense
When you have all of your expenses, list them on your calendar on the date that they’re due. You can write it in red or put a “-” beside it.
Reviewing Your Personal Finance Calendar
Now that you have all of your income and expenses down on paper, it’s time to review it to make sure your payment arrangements are working properly for your situation.
Start by looking for patterns. Does it seem like all of your bills are due around the 1st of the month? Maybe it’s the 30th for you.
If that’s the case, it may be difficult for you to make sure everyone gets paid on time without using a credit card to “float” your income to the next paycheck.
If you’re doing that, you may want to see if some of your creditors will change your due dates. Most credit card companies will easily do this for you.
If you have a large mortgage payment, you should consider going to a bi-weekly payment schedule. This will increase your monthly payment slightly but it will also assist you in balancing your income and expenses. It will also help you pay off your mortgage faster.
Once you understand how your money is flowing, I also recommend taking the information you compiled and adding it to an electronic calendar.
* * * * *
A calendar with your income and expenses will not cure all of your financial woes. It’s just a beginning step to financial freedom. However, when you combine a financial calendar with other things such as a spending plan, you can change your financial issues for good.