Struggling with Fianances (Income Allocation)

Unemployment has touched every segment of society today.  It is still stinging us some 24 months after we started this slippery slope.  If you are one of the millions who has already found themselves out of time, money, resources and federal aid you will have to do some more tightening.  I know there are many of you who are already down to the last notch on your belt.  I also know that there is great power and positive energy in knowing where you are financially every day, every week and every month.  Once a family, a couple or a person has experienced this situation they have a real appreciation for the times of plenty and a stronger countenance during times of trial and lean.

Let’s talk about “Income Allocation”.  If you did not read the last post on March 24th, I encourage you to do so.  If you find it helpful write out the items listed on the post and the percentages given (we are saving ink so do not print it out).  Take your time and get it all down.

OK, today we are going to make ourselves an Income Allocation Sheet.  What that is, is simply a page with a chart on it where you are going to have about 15- 20 categories and what the monthly allocation of funds that goes to each of the line times on your list.

In the center of the page write:   INCOME ALLOCATION

Fold the sheet in half.   On the left side make a wide column title and call it INCOME.  Under it make two more columns and head one with Budgeted Category (this is the list from the post 3.24.2010) and the next heading will be “Monthly Allocation”.  So, down the left side under “Budget Category” you will have:  Tax, housing, food, auto, insurance, debts, entertainment, clothing, savings, medical, miscellaneous, school expenses, investments, savings, church tithe, etc….

Turn your page over to the right side.  On this side you will have a large column divided into 4 columns(each column represents one week).  The overall title over these columns is called INCOME SOURCE/Pay Period.

You know your numbers from last time so fill it in on the left side of your sheet.

You know what you make by the week, every other week or monthly (however you are paid).  Write down how much you can budget for each of the budget category items per week.

What does your life look like?

How are you doing when you look at this chart that you have made for yourself?

What do you need to do?

Yes, I know it is tough to look at.  Yes, I know there are still gaps.  This will not last forever although it feels like it.  You can do this.  Yes, you will get major push back from your kids, and maybe even your spouse.  You are doing the right thing to maintain your financial position by taking charge and not letting the finances run you.  The impulse to spend is like a drug.  Remove the temptation.  Do not go to the mall to walk if you are lured into the stores.  Do not go out with friends who are still spending money that they do not have.  That is not a friend.  Have friends over for coffee instead of going out.  Nothing more, just the coffee.  Not designer coffee just coffee.  It is about the relationship not what’s in the cup. Keep the conversation lively and do not go to that “ugly” place of “want” and “whoa is me”.  There are a million other topics.  If you feel drained after this interlude, then may I challenge you that those are not “your people”.  We all want to be surrounded by up lifting, forward moving thinkers.  Those are the folks that keep their heads above water and move forward.

Another great way of keeping yourself positive is to volunteer your time and talent.  There will always be someone who is in greater need than you and who has more than you.

Next time:  Budget Analysis Sheet.