the simple dollar » 31 days to fix your finances: a wrapup

the simple dollar » 31 days to fix your finances: a wrapup search search: home about my story contact 31 days to fix your finances archives best of... get via email previous post: financial independence week: should i expect my parents to rescue me?next post: the simple dollar morning roundup: sick joe joe edition 31 days to fix your finances: a wrapup 6comments january 31, 2007 @ 3:00 pm - written by trent categories: 31 days to fix your finances bookmarks: del.icio.us, reddit would you like to download this entire series all at once in a handy pdf format? during the month of january, the simple dollar has been running a series entitled “31 days to fix your finances,” a series of activities that can enable anyone to improve their financial status by centering your financial life around your own core values. instead of supplying a bunch of budgeting sheets and asking you to commit yourself to a program, this series is about figuring out what you want out of life and reorganizing your finances so that you can have it. what follows is a summary of the entire month’s activities, with links to each individual day. if you’re at all concerned about your personal finances or find yourself often feeling strangely guilty about the money you spend, you’ll find some value in the activities of the month. let’s get started. stage 1: figuring out your goals and values day 1: your five main values day 2: defining your goals from your values day 3: create a plan for each goal the underlying challenge that most people have with their finances is that they see money as distinctly separate from the rest of their life. money is an antagonist, an enemy that keeps you from doing what you want to be doing. the truth is that money is merely a tool, and when you find yourself feeling as though money is an antagonist, it is no different than a person attempting to learn how to use a heavy sword; it’s unwieldy and dangerous. the first step for learning how to integrate money into your life and use it successfully as a tool is to figure out what exactly you wish to build with that tool. without underlying values, goals, and plans, money is no different than swinging a hammer around without building something. thus, this first stage is crucial: what exactly is most important to you, and what will it take to adequately support those values? stage 2: evaluating your situation day 4: how much did you earn last year? day 5: how much did you work last year? day 6: your true hourly wage once you’ve figured out what is central in your life, it’s time to take a serious look at what you have to work with. how much do you make, and how much time do you spend making it? this seems like an easy question, but it’s not. how much of your income do you spend maintaining your job, via transportation, career development, clothing, and so forth? and how much time do you spend doing things devoted to your job, such as going to work, coming home from work, attending work-related functions, and so on? when you calculate these new numbers, you might be shocked both at how much time you actually spend working in an average week, as well as how little you actually earn. you can drive this point home especially clearly by calculating a number that we’ll use throughout the month, your true hourly wage. how much do you really make for each hour that you spend devoted to your job? it’s not nearly what you might think, and that alone might shock you into considering some different avenues. stage 3: building your own life budget, not following someone else’s prescription day 7: work for your dreams, not your money day 8: breaking down your expenses day 9: cleaning up your expenses day 10: fitting your expenses into the bigger picture day 11: dividing up the rest and finishing our time budget day 12: a flexible “budget” that reflects your reality once you’ve taken a hard look at what you actually earn, you can begin to set up the basic framework of how to spend that money that is in line with your personal goals. this isn’t about printing out worksheets and trying to jam your life into the pigeonholes that someone else has created for you; instead, this is about defining how you spend money and working from there. it’s almost unfair to refer to this as “budgeting,” because budgeting carries with it some very bad connotations, much like putting on an uncomfortable suit. this process is much more like going to a tailor, who uses you as the basis to construct a custom suit that fits you. this process will create a custom budget that fits your life with your values and goals as a basis. we’re not talking about restricting you to spending $20 a month on “dining expenses,” but instead creating a structure where you can decide what’s appropriate because you can see how it relates directly to your dreams. stage 4: looking at your life, piece by piece day 13: pay for your dreams first day 14: get rid of debts (slowly but surely) day 15: coming in under budget and an emergency fund day 16: evaluating your expenses - home and auto insurance day 17: evaluating your expenses - life insurance day 18: evaluating your expenses - energy day 19: evaluating your expenses - automobiles day 20: evaluating your expenses - food day 21: evaluating your expenses - housing day 22: evaluating your expenses - monthly services day 23: evaluating your expenses - bank fees day 24: evaluating your expenses - entertainment and hobbies day 25: evaluating your expenses - credit cards once you’ve got a basic budget in place, it’s well worth spending some time carefully evaluating those numbers that represent you and see if there are any places where there is excess fat - and simply trimming it away. is your electricity bill pretty high? maybe there are a few simple ways to reduce it. getting tired of paying that life insurance bill? maybe you don’t need it at all - or can utilize something less expensive. getting dinged over and over again with bank charges? look at what they’re charging and do something about it. credit card finance charges eating you alive? there are some easy ways to reduce them. we’re looking for ways to trim away fat (things that make you uncomfortable when you look at them) so that the meat (your goals, dreams, and values) have room to thrive. you don’t have to eliminate that daily latte if it brings you joy - just look for the many things you can do without or that you can reduce without significant pain and you’ll have the money to chase your dreams. stage 5: setting the stage for lifelong success day 26: refining your budget day 27: keeping good records day 28: preparing for the inevitable day 29: paying cash day 30: live what you love day 31: keeping it up now that the complete package is coming together, there are some basic methods for keeping the momentum going. what do you do with the fat you’ve trimmed away? how do you keep track of all of your financial information so that it’s not chaotic and incomprehensible? how do you ensure that you’re not ensnared in loan debt over and over again? how do you keep this good thing going? if you follow this plan and keep these principles in mind, you can easily live your dream. it’s all up to you, and it takes just an hour a day for a month to get things going. related posts the simple dollar morning roundup: traffic cone editionthe simple dollar morning roundup: impact editionhow to use your dreams to get financially aheadwant 31 days to fix your finances in one easy to read file? here’s how to get it! did you like this article? you can get the complete text of all the latest articles at the simple dollar in your email inbox each morning by entering your email address below. your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time. comments thank you trent. i’ve enjoyed every day! you are an excellent writer. cindy @ 6:56 am february 1st, 2007 one month to fix your finances… the simple dollar weblog ran a series during january called 31 days to fix your finances, tackling finances one step in the time so that by the end of one month, your money ducks should be sitting in a nice,…… lifehacker @ 1:33 pm february 1st, 2007 trent, i’ve loved this series all month long. excellent job. i also posted today about how to stop living from paycheck to paycheck, but it’s more of a stopgap measure than what you’ve provided. leo @ 4:24 pm february 1st, 2007 trent, do you happen to have a full one-page of the entire series? better yet…hmmm…have you thought of making an ebook out of this yet? just a thought.. :-) it’s very sound advice and a great read. thanks, jd jonathan @ 8:50 am february 13th, 2007 … i was blown away by the candid and honest approach to viewing “the cost of something” and equating that to “number of hours i worked for it.” … nick crellin @ 6:18 pm april 10th, 2007 i have been following your blog since a month and this post tells me what i’ve missed earlier. i have started an online weekly on personal finance with an indian perspective and your posts have inspired me in many ways. and you are part of my weblinks. i guess making it into an ebook is a good idea. thanks ranjan @ 4:29 am august 13th, 2007 leave a reply name (required) email ( will not be shown ) (required) website previous post: financial independence week: should i expect my parents to rescue me?next post: the simple dollar morning roundup: sick joe joe edition the simple dollar is for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. our busy lives are crazy enough without having to compare five hundred mutual funds - we just want simple ways to manage our finances and save a little money. read more about the simple dollar, peruse some of the best articles, or become a subscriber via a feed reader or by email. archives single page | chronology 2007: jan feb mar apr may jun jul aug sep oct nov 2006: oct nov dec this site is hosted by dreamhost.read about my experience with them in detail. the social digg i collect and submit the interesting links i find on other sites to digg. check out my profile to see them, and feel free to add me as a friend. facebook i post more personal items on facebook, as well as occasional pictures and other stuff. check my facebook profile and add me as a friend if you'd like! recent articles » fun» 52 books, 52 weeks: the top ten» melancholy and spending» the simple dollar morning roundup: decisions edition» eight tips from an ultra-frugal parent» 52 books, 52 weeks: how they rank (except the top ten)» six things i look for at yard sales - and how i get them even cheaper» the simple dollar morning roundup: e-book edition» review: fooled by randomness» parental enthusiasm and childhood branding» the sunday afternoon money routine» toy catalogs and children: are they a good match? 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