How to get out of debt, step 1:
Detail every main and alternate income source.
Ingredients: notebook and pen, bank statements, investment information, computer software for accounting.
First, we are going to look at our main and alternate sources of income - reliable income - per month. List all of the monthly paychecks you receive for your job, and the jobs of your family members who contribute to the family budget. What other monthly income do you have? Are you collecting rents on property? Do you receive dividends from investments? List everything that is reliable and comes in at specified periods. We are not including sources that are not reliable in this category, such as overdue debts that you are not sure will be repaid, stocks, and so forth. This is because a fundamental of our approach is going to be solid accountability. The less left to chance, the better.
In your notebook, list all of the reliable sources of income from the last three months. Include your main job/business, and any alternate income source, such as dividends, interest, rents payed to you and so forth. Review your bank account information, income statements, whatever documentation you have to get this information. Next to each source, write the average amount. At the end, tally the totals and see how much practical, reliable income you have per month. If you have not done so already, you should procure a computer software program for accounting, such as Microsoft Money or Quicken. Take whatever statements you have, and put in all of the information for the last three months. These programs will make all of the charting and graphing as simple as clicking a few times with your mouse. Next, we will look at your expenses.
Next: 2. Analyze your finances: Organize monthly expenses by category and tier..