Money Magic. Let’s talk about knowing your numbers… how well do you know your finances?
First step in building a solid financial foundation is getting to know your numbers inside out.
The 7 key numbers are:
1 Monthly income – your total net monthly income from all sources.
2 Fixed monthly costs – total fixed monthly payments – usually direct debits and standing orders, items you pay every month on the same date.
3 Debt repayment amount – how much do you pay for debt, including your mortgage and credit card repayments, online shopping accounts etc.. this lets you work out your debt to income ratio – more on that later.
4 Weekly Cash Spend – how much do you need to cover your weekly shopping, petrol and other “cash” spends, weekends, coffee’s, small gifts and personal care
5 Extras – Christmas, Holidays, fun and other large gifts
6 Savings – Emergencies, replacement and repairs
7 Giving – Supporting a cause close to your heart, £5 a month can make a world of difference to the things you care about and you’ll feel good about it too!
Once you’ve worked out your numbers above, the next step is checking if the sums “add up”.
Money Magic
Let’s do the maths…
1 – (2+3) = total amount left for 4,5,6 and 7
In other words, your Monthly Income minus Fixed monthly costs and Debt repayments leaves you with the money left for Weekly cash spend, Extras, Savings and Giving.
So, go on… work out your numbers and inject some money magic into your finances.
And please remember, if you or anyone you know is anxious about their finances, we’re here to help – you can contact us by emailing: advice@ditchdebtwithdignity.com
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