Keeping on top of your bills is achievable. Anyone can survive comfortably in these financial times if they are willing to work and have a bit of self-discipline. The safest bet is having many small jobs so that if you lose one you have your other jobs to keep you going. Of course, that is not viable for everyone.
Next you need to work out exactly how much your bills are costing you each week. To work this out, all you do is get a bill, let’s say the electricity bill. First you need to work out how much your average electricity bill is. To do this, you get the last four electricity bills, add up all four totals and then divide it by four. For example, say the last four bills were $346.98, $318.67, $296.36 and $453.79. Now add these together, $1,415.80 and divide it by four. The answer, $353.95, which is the average amount of your last four bills, Now, if the bill was quarterly (every three months), you then need to divide that by 12 (12 weeks in three months), which is $29.49. So that is approximately how much your electricity is costing you per week. So for that bill you need to put away $30 per week. You do this to all your bills, working out how much each bill is costing you per week.
Once this has been done you need to work out what you want to do next. You can make an envelope for each bill, writing on it which bill it is and how much you need to put in it each week. This method only works if you don’t have a lot of bills, as the amount of money can become too much to safely keep lying around the house. For example, if you own multiple cars, motorbikes, boats and/or properties, this is probably not the right way to go about it.
If the envelope method is not right for you than what you need to do is add up how much your weekly bills come to. To do this you just add together all the weekly totals that you have just worked out and that amount should be deposited into a bank account every week without fail, before you take money out for anything else, as it is not your money to spend, that is the bill money. This account should be only for the bill money so that you are never tempted to withdraw it for something other than bills. Then, when you get a bill, you pay it out of that account. This way you always have money for any bill that comes in.
And what if your weekly bills come to more than you earn in a week? You take on another job. There are many small jobs that you can do to earn extra cash, especially cleaning jobs, or eBaying stuff you pick up at garage sales, markets, op shops, etc.
And if you can’t do extra jobs, then you need to do things to make your bills smaller as you are living beyond your means.
This may sound very simplistic but it really works.
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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.
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Every government in the world has faced difficulty in providing health services to the population, even Britain and Canada which subsidizes health care are finding it harder to allocate funds with the thinning resources, aging residents and expanding population. In 2009, for instance, the British National Health Service revealed it could not shoulder the costly drugs for renal cancer, earning public ire in the process. But when you think about it, the British are still much better than in the U.S. where Americans are not getting enough help with medical bills.
With meager resources, governments have to prioritize but sadly, health is not among the priorities in the market pie. The United States still relies on the private health institutions to provide help with medical bills for working families in the form of insurance. It’s amazing when you consider that it is the only remaining superpower in the world, spending about $7,000 per capita annually according to the World Health Organization and yet its health system is maybe comparable to third world countries (most of which only allocate $35 annually per person) in terms of inefficiency. How else do you explain why millions of families file for bankruptcy because of medical expenses?
As the U.S. still grapples with the financial crunch and high unemployment rates, employers scrimp on insurance subsidy, resulting to higher premium for the employees. As a result, workers have to forego insurance and just pray to high heavens they don’t get sick. But as always the case when you least expect it, things happen and they find themselves on the brink of bankruptcy if they can’t find help with medical bills.
Although there are charity groups or religious organizations that offer help, and while hospitals have their own financial assistance programs, the resources are just not enough to equally share among the thousands of families in need of aid. With the proposed universal health care gathering dust on the shelves of the U.S. Congress, families who couldn’t find help with medical bills turn to more extreme means to get by. The options become narrower and narrower: bankruptcy, high interest loans or be buried in debt.
M. Baylor, of Hurst Texas, grew up with both parents as doctors. Laws concerning medical care governed his fascination as he grew up. As a paralegal in Allmand & Lee, Marcus maintains an informative blog about medical bill debt, medical litigation, and the latest in the health care reform bills and government programs.
The Secrets About Medical Bills blog seeks to address all sorts of legal questions that people have on the subject. Providing insight and alternatives for those saddled with medical debt and issues that arise through no fault of their own, Marcus seeks to bring help to people who suffer financially due to health issues. Visit Marcus’s blog to find out the latest legal tactics used to fight on behalf of the patient against health insurance companies.
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