Bank finance articles and tips

There is an easy way to start getting your monthly bills under control... create a spreadsheet, list all of your monthly bills, categorize each bill and then let the spreadsheet do the bill calculations.

Just a recap on organizing your monthly bills; Step #1 is to gather all of your monthly bills into one location as they come in. Step #2 is to schedule a "monthly bill paying day" each month preferably the day after you just get paid.

Those two steps are pretty simple. Don't mistake their simplicity with their importance. If you want to be effective in getting control of your monthly bills you have to do these two steps first:

#1 Where are all of your monthly bill physically or electronically located?

#2 Once you find them when do you plan on paying them?

Before moving on I think it is important to create a goal for all of this organization that we are going through. The goal with all of this organization is to get the monthly bills under control.

Need more definition - what does under control mean? What is our ultimate goal?

Our preliminary goals for all of this organization are:

A) Monthly bills are paid on time

B) Monthly bills will come in under budget

C) Money will be left over each month for life's unexpected emergencies

D) Money is moved into saving each month

Our ultimate goal is to have money left over each month after moving money into savings for our own discretionary spending i.e.: "I'm buying it because I want it." We want the freedom to purchase!

But first...

Monthly bill paying is such a chore. Mainly because it is typically disorganized and when you do pay the bills there is never enough money left.

To gain control we eventually will need to move from bill organization to monthly expense budgeting, and finally to saving a little each month.

Before you can create a budget for your monthly bills until you must know exactly what your bills are, where you are actually spending your money, what stores you frequent, how many times you go out to lunch, how many movies you saw, your family's cell phone bills, gas for the cars, car insurance, life insurance, etc...

Your 3rd step is to find a bill calculator that will categorize what you are spending your money on and how much you are spending in each category. To gain control of your monthly bills you have to know what is being spent each month in each category.

Before you can budget you need to gather a list of all of your monthly bills properly record them and then add them up. Before you create a budget get control of what that budget should be.

Online banking has helped tremendously with this step. If you have a home accounting program like Quicken or Peachtree you can download your banking data right into those programs. They will even guess what category you assign each bill to.

The good news about software programs is that they work. The bad news is that they break, they cost money, you have to learn how to use them, and then they require you to upgrade to stay current. But again... they work.

Online banking will probably one day soon help us all by categorizing these expenses upfront for us. The banks are dragging a bit on this point but it will happen.

For those of us that don't use online banking to keep our list of expenses or don't use Quicken, Quickbooks, Peachtree or MS Money to gather our list and categorize the expenses there is a simple solution.

Create a spreadsheet with all of the typical monthly bills that occur. In the beginning keep it simple. As an example if your wife bought gas at Shell and you bought gas at Kroger then the category is GAS. Eventually you may want to break it up to see which vehicle is using the most gas but in the beginning keep it simple when listing, categorizing, and calculating monthly bills.

Example: If you go to Sears and buy pants and then you go to Kohl's and buy a shirt the initial category is Clothing, not a category for Sears and on for Kohl's.

The object of categories is for you to learn exactly what you are spending your money on each month. The categories are not meant to see exactly where you spent the money. You need to know "what" you spent the money on not "where."

I hope this is starting to make sense; you can't really get into budget mode until you know how much you are currently spending in any one category by calculating your monthly bills. You can't get to placing items that you buy into categories until you list them - that is you write them down!

How many times did you go to lunch this week? How much did you spend on lunches? What about insurance costs, if you wrote down all of the insurance, home, car, boat, motorcycle, RV, life, AFLAC, etc how much does all of that cost? Can you get a better deal on insurance?

Let's face it; you are going to buy things each and every month. There is no way around it. Throughout your life there may be times where the monthly bills get out of control. Your goal is gain back control. There is an easy way to start... create a spreadsheet, list all of your monthly bills, categorize each bill and then let the spreadsheet do the bill calculations.

If you do this bill calculation step you haven't created a budget yet, but at least you will know what needs to be in the budget.

David A. Peterson is an independent New Hire Sales Trainer and Sales Consultant in the Atlanta, Georgia area. He has over 20+ years experience in sales, sales training and sales management including P/L, budgeting and new product development.

David is using his P/L and budget experience to help you control your own monthly bills. For a free copy of a bill calculator
click here.

By David A. Peterson
Article Source: http://EzineArticles.com/?expert=David_A._Peterson