I'm Already Behind!
by Jane Chidester
Get Out of Debt in 3 Steps
Which Debt First?
The 7 P's of Early Loan Repayment
Q: How do you start a budget when you are behind with past-due bills?
A: Wow! I'll try to cover a few points here, but know that there is a lot that can't be answered simply.
In short, you'll never be able to catch up with the "past dues" unless you implement a budget. The cycle will not be broken until you see exactly where the money is going, and when. Only then will you have hope of gaining back control. In my book, I use the analogy of driving a car blindfolded. For an important task such as driving, where lives are at stake, we go to great lengths to give as much information to the driver as possible: mirrors, glass all around, instruments that measure speed and fluid levels. Now think about what would happen if you took just one of those feedback mechanisms away. Suppose you didn't have a gas gauge--you could be stranded, forced to spend time and money to get going again. Or, to prevent that, you'd stop for gas more frequently than needed, wasting time to ensure an adequate supply. Running your finances without a budget is like driving a car blindfolded.
In the process of setting up a good budget, you'll see the areas of your spending that need adjustment or redirection. Once you know how the money is coming and going, you'll have to allocate a new "expense" to catch up on past bills. It is the same as if someone were trying to pay off credit card debt. Paying off the debt becomes an itemized expense in the budget itself.
A common misconception is that a "budget" is just a list of your expenditures, or a "tracking" of your spending. These types of budgets don't work. You need one that combines "up front" planning with controls and mechanisms much like the car analogy. You need features that give you the information you need to make the most intelligent decisions and ways to ensure your budget is regulating the expenses you are watching. You need to be at the controls, and a good budget will put you there!
Simple Money Management from Quicken It's so easy, you'll actually budget!
Remember, a budget is a tool (like your lawnmower is a tool, or your computer is a tool) to help you function better!
Jane Chidester Jane@TulipTreePress.com is the author of "BudgetYes! 21st Century Solutions for Taking Control of Your Money Now!"
Related Dollar Stretcher Video:
Take the Next Step
- Are you getting the best CD rate? Use our simple tool to find out. It's completely private, extrememly simple and you'll know what rate is available to you in seconds!
- Compare money market rates with our best rate finder. Don't let your bank pay you less than you deserve. It only takes a minute and your privacy is completely protected.
- Subscribe to our weekly Surviving Tough Times newsletter. Each issue of this free html newsletter features tips and articles to help you stretch your dollars and survive in this challenging economy.
Share your thoughts about this article with the editor
Trending on TDS
- How to use the home loan comparison calculator
- Taking over your parents' finances
- 8 job hunting myths
- Salary negotiation for the common person
- Managing money during different stages of life
- How a little education could save you money or even make you money
- How investing style changes over your lifetime
- 5 poor ways to save (and how to do better)
- What to do if your credit card rate goes up
- 3 steps to rebuilding an emergency fund
- 5 big bills you can cut fast
- Money-saving secrets of the rich and frugal
- Reduce your debt with this free debt course by The Dollar Stretcher
- Reduce your debt payoff time
- Find a better credit card rate
- Get better savings & MMA rates