The number one argument in most families is the use of money. You can improve the relationship if you make a commitment to some sound money management principles.
When you get your paycheck, if you are self employed, pay social security, medicare taxes and April 15 taxes first. If you don’t pay the government, it will always cost you a lot more than you originally owed!
After the taxes, write the checks in this order.
- Rent or mortgage
- Utilities – electric, gas, water/sewage, homeowner’s fees, phone
- Insurances – health, house, car
- IRS – judgments – child support – alimony
- Child care
- Groceries
- Auto fuel
- Medicines – medical copay
- Daily pocket money
Next pay the car note – if you can’t pay for the car because there is not enough money left after funding the other items’ above, sell the car and buy one that you can pay cash for and eliminate the note until you can save enough money to buy the car you want.
Next pay the medical bills – most offices will work out payment plans.
Then pay student loans
When all other debts are paid, pay the credit cards. Don’t use a credit card if you don’t have the money in the bank to pay for the item. Separate want from need. This includes 90 days same as cash and no interest for one full year.
Last, buy things you want. If you don’t have the money, work it into your plan for the next paycheck. A wise woman once said, there is not a single thing that I ever see and want to buy that I would go back and buy if I had to wait to put it in the next paychecks budget.
Basic Precepts for Handling Finances
Keep your checkbook record accurate – never spend a penny based on the balance.
Make and operate off a daily budget that has already been funded.
Make your budget based on what you actually put in the bank, not what your salary package is
Never spend more in a pay period than you made and never spend all of that.
Never buy today with money you still must earn tomorrow
If you use a credit card, the item you are purchasing must already be funded – that is money already in the bank.
If you are in debt, do not save one penny until you are completely out of debt.
Married couples should never buy anything not in the budget without discussing it with the other spouse, even if there is only one wage earner in the house.
How to get out of debt fast
Use no annual fee credit cards if you pay off your balance each month.
Don’t purchase any goods or services with a credit card that you cannot pay off within 30 days.
Use debit cards rather than credit cards.
Don’t purchase perishable goods with credit cards.
Shop around for a low interest credit card.
Transfer credit card balances from high to low interest cards.
Pay off the highest rate card first. Put all extra money you have over and above the minimum payment into paying off that card.
Get an extra job to pay off debt, not to buy extras.
For more help, contact the Consumer Credit Counseling Services in your area. The web page is www.moneymanagement.org.
