"Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, not our Darkness, that most frightens us." ~ Marianne Williamson

Saturday, February 4, 2012

Financially Fit Status Update...

My New Year's resolution for 2012 included being "Financially Fit." If you didn't read my blog for that week, here's the link http://www.seebelieveandachieve.com/2012/01/2012.html or you can scroll through down find what changes I've committed myself to working on for 2012.

I am happy to report that things are on track thanks to a budget formula from finance guru Suzie Orman (LOVE her!). About two years ago, I watched a special where she provided this budget tool. It has put my spending habits in check and keeps me focused on reaching my goal to be financially fit. I have found this to be helpful, but you may need to make adjustments according to your own situation. However, it is a great start!

Having my finances in order helps to keep my mental health balanced, especially during tough economic times. I hope you find the information below helpful and that it aids to get you back on the money track. I'm sure am glad I wrote her formula down at the time, because I have had no luck finding anything online regarding her budget formula (phew!). Ready, set, go!

Big hugs,
Ane :)

Suzie Orman Budget Formula:
  • Get a journal to keep a list of all your monthly expenses. Place the month on the top and the date. 
    • Use your journal to list all bills. After you make a payment put the date and any confirmation numbers next to the item. Being organized is SUPER helpful when you're trying to get financially fit. 
  • Set time to pay bills.
    • I set aside no less than an hour to do this and I try not to make any purchases before doing this. The sooner you make your budget, the more aware you will be as to what you can spend.
    • Be honest. It can be a little overwhelming, but remember we have to start somewhere.
    • Start by taking the total amount of net income you bring in each month.
    • Use the formula below to calculate just how much you should be spending in each area. Depending on your own situation, you can work around it to fit your budget/spending
% Budget Formula:
Percentage is based on net income and what should be spent in each area. 
30% : Rent/Mortgage Payment 
16% : House hold expenses (utilities, internet, phone, etc.)
13%: Transportation (car payment, insurance, gas)
10%: Entertainment (movies, dinner w/friends, etc.)
10%  Savings- This amount should go directly to a savings account, preferably one you have limited access to. 
10% Debt Payment (credit card bills, parking tickets, etc.)
7%: Groceries
4% Miscellaneous (emergency funds such as tire repair, plumber, fees)