Taking Control of Your Finances
Heather's Financial Situation
Ever have a friend that seems to burn through money. Let's see if we can help her out.
Here's the situation:
Your friend Heather is seeking your advice.
Heather asks, "Hey, I heard you are learning more about keeping your money straight using this web-based program. I was wondering if you could help me get organized so I can figure out where all my money is going. I'm worried about how much I owe and I've been having problems lately just making ends meet. I'm getting so sick of eating ramen or the dollar menus all the time! I'm anxious that I don’t seem to have money to save right now. I haven't even been able to make payments on my credit cards. I am sure I could ask my parents for help, but that's a last resort. Can you help me?"
How to proceed:
Help her get a handle on her cash flow. Once she is aware of her cash flow she can think about how to manage it more efficiently and create a savings plan.
Heather's Monthly Income and Expenses
Heather works 40 hours a week and makes $12/hour. Take Home Income: $1,600
Home Expenses
- Monthly rent: $400
- Home Maintenance: 0 (included in rent)
Utilities & Food
- Utilities: $50
- Cable/Internet: $80
- Telephone (cell, land line, pager): $60
- Food Away from home (lunch, dining out): $120
- Groceries & Household Items $350
Savings & Credit Card Expenses
- Credit Card/Debt Payments: $250
- Savings $0 (for now)
Insurance, Medical, & Child Care
- Insurance (life, medical, disability, if not already deducted from paycheck): $0
- Monthly Medical & Dental Bills (co-pays, prescriptions, dental, optical): $20
- Child Support/Alimony: $0
- Child Care/Elder Care: $0
Personal Living & Recreation
- Laundry/Dry Cleaning: $20
- Going out, tobacco, liquor, beer, wine: $80
- Clothing: $100
- Beauty/Barbershop: (nails, haircut, personal care): $20
- Recreation (movies, video rentals, sports, concerts, cd’s, vacations) $120
Transportation
- Vehicle Payments: $250
- Car insurance tag/ad val lorem taxes: $80
- Car Maintenance (gas, oil, parking, repairs): $160
- Public Transportation: $0
Misc Expenses, Contributions & Dues
- Club & Union Dues, Health or Sports Memberships: $50
- Contributions (Charities & Religious Organizations): $25
- Gifts/Cards: $25
- Miscellaneous (magazines, newspapers, postage, pet care): $10
- Continuing Education (Tuition, books, supplies): $300
Let's look at Heather's cash flow...
Enter them into the calculator»
Short on Cash
So your friend, Heather, is almost $ short each month.
Where would she get the extra money?
What could she cut out?
Try to re-work her expenses.
Can you find some additional wiggle room?
How about you? How is YOUR cash flow?
Use this calculator to see how you compare to the suggested guidelines in different spending categories.
We created this spreadsheet (39KB xls) that you can download and use to keep track of your own expenses.
Are you able to save? Are you able to plan to save within the next year based on changes to your spending?