2) Are You "In the Red"?
Are you spending more money than you're earning on a monthly basis? The variety and ease of credit has helped many of us lose site of the bottom line. Evaluating your cash flow is the first step towards realizing stronger financial footing.
3) Create an Itemized Budget
Once you've established your overall expense to income ratio, create a detailed, itemized budget of your monthly expenses if you donâ€™t already do so. When calculating expenses that can fluctuate from month to month (such as the cost of gas, groceries or energy bills) be conservative and round up. Always be honest about the expenses you see from month to month â€“ after all, you'll only be cheating yourself on anything you "fudge". Seeing your actual expenses on paper makes it far easier to decide what is necessary and what can be cut.