Back to School - Back to Basics

A school new year brings many thoughts - a new beginning, a fresh start, a new perspective. The summer is a time to take a break, rejuvenate and enjoy. For some, the new school year brings thoughts about being a good student and learning new things.

Just like traditional school, we need to get back to the basics in our personal finances. In order to start off on the right foot with your finances, you must have a good understanding of our personal finances.

Do you have any personal goals that require finances? Are you looking to pay off debt, purchase a home or car, increase your savings, begin investing? You have to know where you are in order to get where you would like to go. It's time to get organized. Get your pen, paper, calculator, highlighters, calendar as well as your bank and credit card statements for the past month, or the electronic versions if preferred. A few important things to keep in mind when reviewing your financial statements are:

Income

Expenses

Due Dates

Amount Due

Interest Rate

Review your statements and calculate the amount of money that comes into your home. Write down your pay dates for the month. Next, calculate your monthly expenses, beginning with your necessities such as housing, food, electricity, water, etc. Then, categorize the items on your statements as needs, wants, bank fees, late fees, etc. Also, write down the due date for all of your bills.

A few things will happen as a result of this exercise - you will see exactly where your money is going? Is it going to the coffee shop, your favorite restaurant, or on entertainment? If you continue with your current money habits, will you get to your desired goal?

If you completed this and realize that you have more month instead of money, don't feel ashamed. Now that you are aware of the situation, it's time to put together a plan. When people look at their finances and realize they don't have as much money as they like, they only think of what to eliminate. My mentor shared that this is a perfect time to get creative and find ways to generate more income. Do you have items at home you no longer use? Consider selling them. Do you have a knack for baking, writing, shopping? These can all become ways to earn additional income. If you have subscriptions you no longer use, contact the provider and cancel the service. You may also be able to shop around or negotiate for better pricing for services you currently use.