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Earlier this year, we brought you the first four of twelve steps toward living a debt-free life.

The first step was to take stock of your debt by writing down exactly how much you owe to whom, plus information on payment amounts and interest rates. Put that information into a spreadsheet.

The second step was to assess your spending, and work hard on not incurring any more debt than you already have.

The third step was to call your credit card and loan companies and see if you could get your interest rates lowered!

The fourth step was to create an emergency fund so that unexpected expenses like car repairs or medical bills don't completely derail your finances.

This month we're on to the fifth step: You’re going to organize your finances.

Hold onto every receipt, bill, paystub and invoice you produce throughout the next month. Sometime during the last week of your 30-day tracking, sit down with all of your paperwork and start crunching the numbers.
When you’re through, you should have all of these questions answered:

  • How much is my net monthly income?
  • How much are my monthly fixed expenses? These are things that don't tend to fluctuate, like your rent, car payment or other standard monthly bills.
  • How much are my monthly non-fixed expenses? These can include expenses that change month-to-month like groceries, plus "optional" expenses like eating out and entertainment.

Now that you have the numbers in front of you, work on creating a budget. Designate the necessary funds for your fixed expenses. Then, with the remaining money, determine how much you will spend in each non-fixed expense category; like groceries, clothing, entertainment, etc.

Put your minimum debt payments in the fixed-expenses category, with another category for extra debt payments in your column of non-fixed expenses.

Need help on all of this? We're here for you!

CommonWealth One regularly offers two free (we like free!) webinars each month on how to create and manage your personal budget. One of those webinars is this week, and it focuses on identifying spending leaks and reducing expenses, as well as exploring the various means of tracking expenses. You can sign up for these webinars (and a lot of other ones, too) at

Can't make it to a webinar? That's ok! CommonWealth One provides all members with free access to Banzai, a program with financial lessons for all ages! This includes a 5-minute coaching video on creating a budget, which you can access here.

In addition, you're always welcome to set up an appointment with one of our certified financial counselors — it's a free service we offer all of our members because we want you to be successful.

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