Counting Cupcakes & Financial Preparedness

If you’ve been following us for awhile then you’ve heard my metaphor for the cupcake. We all love them, we all want them, and we tend to eat them all up far too quickly, just like its financial counter part, MONEY. Cupcakes and money both require self control and awareness in order to keep them from running our lives whether through weight gain or debt gain.  If you are like millions of other Americans than you’re feeling the financial pinch and worrying about how it will affect your future and your family. You are also very aware how financial preparedness could have changed or will change your life.

Financial Preparedness is really just a diet only you’re exercising control over your wallet rather than your fridge.

The Financial Diet

Track Spending

Follow your own paper trail to figure out where you go wrong. There are two ways to do this.

1. If you keep ALL you receipts then sit down and categorize all your spending and income from the PAST three months.
2. Track all of your spending and income for the NEXT three months.
3. Or a combination of both

 

Needs vs. Wants

Ask your self these 5 questions as you look over your expenses from above.

• Can I do it myself for less with similar results?
• Is there a cheaper alternative?
• Is it more (quantity or quality) than I require?
• Do I need this to acquire the necessities of life?
• Will I literally die without this?

Budgeting

It’s time to start telling your money where to go and what to do instead of it telling you where it went and what you can’t do. Define its boundaries and tell it who’s boss then stand your ground!

Saving Money

Start setting aside a little something for emergencies. This keeps you from using your credit cards as a backup, which is probably how you got here to begin with. Aim for a thousand dollars. If all you can do is $20 a week than do it!

Get Out of Debt

Lose the weight that’s holding you down by paying off those outstanding debts and freeing up more of your income for other things.  Pay off the smallest or the highest interest rate first. Use the money that you normally would have spent on “WANTS” and throw it at your debt payments. No matter how you snow ball it, the results will set you free.

Where Are You in Your Financial Diet?

Here’s some more encouragement and here are some free financial calculators to aid you on your journey to financial preparedness.