30-Day Money Cleanse
Start a Financial Plan
Think of this four-week program as the money equivalent of a fat-busting juice cleanse. It's meant to shock you out of your financial rut and put you on a path to better spending habits that'll last forever. Pick a Sunday to get started. You'll use weekends to tackle long-range goals, and complete doable, satisfying challenges on the weekdays. By the end of the month, you'll have a solid budget, way less money stress, and a healthier bank balance. Like any cleanse, you'll see results fast. And you can eat whatever you want... except maybe caviar.
The "weigh in": Know what you owe. Make a list of all your debts, along with the interest rate you're paying for each and your monthly payments. Do you have a mortgage? Student loans? A balance on credit cards? Did you buy a sofa on an installment plan? Owe any back payments to the electric company? Write them all down on a sheet of paper or in a spreadsheet.
Now, tally your other monthly expenses. Figure out how much it costs to keep your household running, from groceries to Girl Scouts dues. Add this amount to your debt sheet from yesterday.
Name your main money goal. If you've got high-interest debt, like on credit cards, your plan should be to pay it down, because it's costing you big. (For example, if you owe $3,000 on a card with 16 percent interest, you'll end up paying more than $4,000 if you're making only the minimum payments.) No high-interest debt? Aim toward beefing up your emergency or retirement funds, then saving for a trip or giving more to charity.
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Do the math. Pull out all the numbers you've been jotting down and subtract your debt payments and household expenses from your take-home pay. That's what you have to put toward yesterday's goal, and the "fun money" you can spend on things like eating out. Voila! Now you have a budget.
Financial date night! Get your partner on board: A recent study found that feeling like a spouse wastes money boosts the risk of divorce by 45 percent. Show him the numbers you've worked up, and agree together on how much you'll put away each month toward your goal. If you're single, write out a contract with yourself, and sign on the dotted line to make it official.
Wrangle your paperwork. Pull out all the receipts, tax returns, bills, and insurance claims you have lying around in various folders, drawers, purses, or envelopes. Stack 'em in a neat pile--you'll need them tomorrow.
Set up a financial filing system. Grab all the stuff you compiled yesterday and organize it. Designate one folder for receipts to get you ready for next year's tax deductions, one for unpaid bills, and others for any categories that make sense for you. If you get some or most of your bills electronically, use the free site manilla.com to organize all of your paperless statements in one place, to keep you on top of bill paying.
Start tracking your spending. An easy way to stick to the budget you set up on Day 4 is to sign up for a free account at mint.com or another budgeting site. Or you can opt for an old-fashioned notebook and use that to log all your expenditures.
Spend nothing today. Your first week was all about getting a grip on exactly where you stand with your bills and outstanding debts. Now, it's time to start being more mindful about your purchases with a one-day money "fast." No eating out or ordering in. No quickie trips to Walgreens--and bring your coffee from home. You'll see just how much you could be banking after you detox from all that unconcious spending. (Cash saved: $30--$50)