Credit Counseling with
the Sudbury Community Service Centre
Getting Your Finances Into
Have you ever asked a professional to help you get in shape?
Whether it is through exercise, diet or both, thousands of people
spend untold resources on personal trainers, nutrition counselors,
memberships, equipment and books. Far fewer, however, take such a
planned approach Ė or seek professional help Ė to get their
financial situation back in shape. Those who do however, will
usually see results that are positive, and often much longer
Helping people manage their finances is the mission of the 26
not-for-profit member agencies of the Ontario Association of Credit
Counseling Services (OACCS). These agencies have a thirty year high
rate of success, with less than 2% of clients needing to return for
further counseling. The OACCS recommends a five-step plan for those
who want to take control of their finances.
Where do I start?
After making a decision to improve your personal finances you must
follow the following steps: setting goals, assessing resources,
establishing the plan, controlling spending and assessing progress.
Each of these steps will take you along the road to financial
Why is goal setting so important?
Goal setting provides the motivation which drives the rest of the
budgeting process and makes it easier to stay on track when
temptations arise. Group your goals according to the time in which
you could reasonable expect to meet them: short-term (less than a
year), medium-term (one to ten years) and long-term (more than ten
years). Be realistic and donít let your over-enthusiasm set you up
for a fall. Instead, make your goals "S.M.A.R.T.", that is Specific,
Measurable, Achievable based on your income, Relevant to your
lifestyle and Tentative so that they are flexible enough to be
changed if necessary.
How do I begin assessing my resources?
Determine what income your have each month then allocate it towards
payment expenses, reducing debt and saving for your goals. Be
conservative in your estimate, leaving out variables like overtime
and bonuses. Those extra amounts Ė if they materialize Ė can then be
designated of special extras, whether purchases or savings. If they
donít come your way, it wonít hamper your ability to live within
your budget. If your income fluctuates month to month, use a low
month or a monthly average as your budget base.
How do I establish a plan?
The spending plan, either on a piece of paper or computer
spreadsheet, is a picture of how you will allocate your money each
month. Divide your expenses into four general categories: fixed
expenses, debt payments, savings for goals and discretionary
expenses. The first three are essential, and the last is what you
would do if you had money left over. Designate your income over
these categories in order of importance, constantly asking yourself
if the item is a "want" or a "need".
How do I control my spending?
Once youíve allocated your expenses, track them to ensure you donít
put out more than youíve budgeted. This is the key to making your
budget work. Keep a small notebook with you and record expenditures
as they happen. Record all expenditures as even the seemingly
insignificant purchases can quickly add up. Compare these to your
budget to see how and where it varies, then make the necessary
adjustments. For instances, if you are spending three weeks grocery
money in two weeks, determine why. It may be that, because of sales,
you purchased three weeks worth of food. On the other hand, it may
be due to impulse buys that were "wants" instead of "needs"
How can I assess my progress?
As with any plan, itís important to step back occasionally and see
how well youíre doing. Remember, good financial planning will become
a habit but itís a habit that has to be learned and practiced before
it comes to you naturally. Like all personal improvement plans you
have to stick with it to make it work, but by keeping a positive
attitude and looking for ways to improve your budget and record
keeping, youíll begin to see your money work for you.
For more information contact the Sudbury Community Service Centre at
(705) 560-0430 or 1-800-685-1521.