Feeling overwhelmed by finances? Time to grab a pen

Are you currently feeling totally overwhelmed by your financial situation? Don’t have a clue what you have coming in compared to what is going out? When you feel like this and the pressures of life start to pile up it can be very difficult to face up to the situation and it can instead be tempting to just try and ignore it. As time passes though things can quickly get worse and even out of control. If this sounds like your life at the minute then the most important thing you can do is to grab a pen and paper, flick the kettle on and start trying to make some sense of things.

Write down everything you have coming in

You may know how much money you get from your monthly pay packet but what about any other sources of income, child benefit, Tax credits or other benefits for example? Have you ever taken the time to sit down and add up every single penny you have coming in on a monthly basis? Doing so can be the first step to understanding your true financial position. What is the second step?

Write down your regular outgoings

Listing all of your regular outgoings like standing orders, bills, direct debits, rent or mortgage payments and your weekly food spend is the second step to understanding what is going on with your money. By adding up all of these regular outgoings and then deducting the final figure from your regular income figure, you will be able to see exactly how much disposable income you should have left to spend each month.

One other thing that can be helpful is to then split all of these outgoings into separate sections. You may have a section for utilities, one for debt repayments, one for insurances and perhaps even one for extra luxuries that you could possibly do without. If you have a debt repayments column you could also list these by order of priority when it comes to getting them paid off. Some credit cards may carry a higher rate of interest than others for example or if you’ve been struggling to pay them, some may be further behind than others. You can also think about switching some of your insurances or utilities to find a better value deal.

Write down everything you spend on a daily basis

Now this really can be an eye opener. We wrote a post about these insignificant spends in the past and how they can add up over the course of a week. I’m talking about that coffee from Starbucks, that dinner time sandwich, even parking fees. Writing down everything you spend – and I mean EVERYTHING – can give you important insights as to where you’re wasting money.

Making changes

It’s amazing the perspective that can be gained from simply writing down all of your income and outgoings. As we said earlier, you may discover that you have some outgoings that could be considered as luxuries rather than necessities and you may feel that you need to eliminate some of these. You may also find that you simply don’t have enough income to cover your outgoings, at which point you might want to consider a second job or building up some sort of side-line income. Finally, you could find areas where you can make adjustments to – or even create for the first time – a budget that will help your finances to recover.

It could be painful to face up to the facts but at least you won’t have your head buried in the sand anymore. You’ll have a good overall understanding of where you are at financially and you’ll be armed with the knowledge to do something about it, rather than spending every waking hour just worrying about it.

Have you ever benefited from simply listing your finances down on a piece of paper or a spread sheet?

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20 Responses to Feeling overwhelmed by finances? Time to grab a pen

  1. Adam, the tips listed here have changed our lives. We were overwhelmed by our finances for years, until we learned how to take control by following the tips above. Great post, my friend!
    Laurie @thefrugalfarmer recently posted..March 2014 Recap and Our New E-BookMy Profile

    • Adam Buller says:

      Thanks Laurie and I’m sure there will be many people out there who feel a similar way. If you take the time to do the maths then your situation can become much less complicated overnight, only then can you move forward. Glad you’re doing well!

  2. I don’t usually jot down my finances because honestly I really hate writing since I’ve been doing an online job. But this week I’ve purchased some stuffs to start my small online business.
    Marie @ My Personal Finance Journey recently posted..Obamacare Is Causing a Rise In Cash-Only DoctorsMy Profile

  3. I write my finances once a month, and check how much I gained or loss during that time span. All I can say is that it really helps me monitor my finances well.
    Money Saving Dude recently posted..Book Review: The Millionaire Next DoorMy Profile

  4. It’s easy to get overwhelmed with finances – there’s just so much information. But like the old saying goes, “How do you eat an elephant? One bit at a time.” You have to start somewhere, and getting out that pen and paper is a start. Getting better with handling finances is an iterative process that can take time – the important thing is to just start something..you can always tweak things over time!
    Brock @cleverdude recently posted..What Would You Do: Is the Customer Always Right?My Profile

    • Adam Buller says:

      That’s why I prefer a pen and paper to a spreadsheet initially Brock. I think it’s helpful to get a quick overall view of the situation before digging a little deeper with the technology, but that’s just me.

  5. I have found a spreadsheet to be very valuable for sorting out my finances. There is something about seeing it all written down and categorized that really brings your spending into focus.
    Brian @ Luke1428 recently posted..7 Unfortunate Reasons People Spew Hatred at Dave RamseyMy Profile

  6. debt debs says:

    Best thing I ever did was starting to put it on paper, then spreadsheet.

    I used to say, “I work on the computer all day, I don’t want to do this on my time off too!”

    Well what I thought was going to be a burden is actually freedom. Ya just gotta do it! Everything will get better.
    debt debs recently posted..Top Ten List – What I Don’t Like About My InvestmentsMy Profile

  7. Great advice! I think really becoming aware of what you have coming in and going out is essential. Its way to easy to loose track of where the money is going and coming, which can really lead you to snowball out of control. You tips here will certainly help increase awareness and prepare one to start really solving the problem. Thanks for the post!

    • Adam Buller says:

      Thanks WD! It did alert me to some outgoings that I’d forgotten even existed and didn’t really need anymore. When I think about the money that it’ll save me over the course of the year, it should turn out to be quite a profitable hour of my time. ;-)

  8. Daisy says:

    THe power of a simple pen when it comes to getting on track financially is astounding. Many people underestimate their spending and overestimate their earnings, so I would say that after you write down what you think your incoming and outgoing cash flow is, it’s also helpful to have cold hard proof. I try to track my spending every month to ensure that I’m on track and that I’m not spending above my priorities.

  9. James says:

    Good stuff. One additional point I would add is the more information you have your spending, the better able you are to track what your outlays are.

  10. Alex says:

    Some poignant advice here. This post and others alike will surely be relevant to pretty much everyone at some point in their life. Thanks for the words of wisdom.

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