Local house cleaning company Molly Maid offers wise ideas for spring cleaning. They suggest starting with tasks throughout the house, like dusting ceiling fans and light fixtures, before moving on to room-specific chores. The spring cleaning checklist is great, but it is missing one important area: your personal finances.
Clearing out the cobwebs of your personal finances can happen anytime, but spring is a great place to start if you have never brushed up the bank books. Like a breath of fresh air, a close perusal of your purse and pockets can set you on a path to a wealthier, happier life.
Personal finances include:
- Assets — everything of value that you own
- Liabilities — everything you owe
- Income — money actively coming to your household
- Expenses — money spent on needs and wants
- Savings — one of your assets
- Investments — stocks, bonds, retirement accounts; all are assets
- Protection — all types of insurance, including homeowners, automobile, life, disability, and umbrella policies
You can wrangle all these parts of personal finance into a few neat documents.
Businesses cannot operate with a balance sheet, which is a statement of assets, liabilities, and capital, detailing the balance of money coming in and money going out, for a given period.
A balance sheet shows what actually happened to your money, looking back in time. It is a summary of past spending and income. It is grounded in reality, not in what you hoped to achieve.
Households can operate more efficiently if the breadwinners routinely use a balance sheet to track what is brought into the household, spent, and saved. Your kitchen pantry can be sparkling clean, but without knowing your financial situation, it can also be completely empty.
Plenty of free, online programs are available for starting a balance sheet. Take a tip from successful companies and start with a visit to the Small Business Administration for the basics.
A budget is not a balance sheet. A budget is a plan for the future, while a balance sheet is a report on what actually happened. No household can afford everything everyone wants without operating on a budget.
For instance, say you planned to spend no more than $200 on entertainment at New Year's, so your January budget would say $200. In February, your January balance sheet would show … ahem … that you spent $539.17 on entertainment expenses. Whoops!
A budget helps you save for goals:
- Early retirement
- College or advanced education for your kids
- Home improvements
A budget helps you see where too much money is headed out the door for things or services you do not really use or enjoy. A budget pinpoints all those electronic subscription services, for example, that quietly nibble away at your bank account each month.
A budget allows for your teenagers' increased appetites, so you can shift money from, say, “Accordion Lessons” to “Groceries.” Your children will be grateful for the newfound abundance. (And everyone would be grateful if you gave up the accordion lessons.)
To get started on making a budget, consider using tools from Consumer.gov or your own spreadsheet program.
Though many Texans are hesitant to talk about real financial distress, spring is an excellent time to start fresh, to awaken with a sense of renewal. Bankruptcy can be a viable option for your family if you tally everything up and still come up in the red.
Personal bankruptcy can be achieved with either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. Choosing between the two requires analysis, thorough knowledge of the Texas court system, creditors' behavior, and the law.
If spring financial cleaning leaves you still in need, turn to an experienced bankruptcy attorney for practical solutions. Knowledgeable bankruptcy lawyers can not only get your financial house in order, they can save your actual house from foreclosure.
If you choose your lawyer wisely, you can also find a friendly, helpful attorney who considers all aspects of your challenges.
For more information about filing bankruptcy as part of your spring financial cleaning, please contact The Page Law Firm today! Attorney Théda Page has more than 30 years' experience offering compassionate, supportive help. You may also reach her at (214) 618-2101 for a complimentary strategy session.