One Step at a Time: A Journey Toward Financial Independence

This is part 1 in this series on getting your financial house in order. To see all of the post in this series click here.

Step 1: Find out where you stand.

Welcome to the journey toward financial independence! In this series we are going to evaluate and share actions that we are taking in order to gain control over our finances. We do not know how long this series will be, but we are going to try to post at least once a week on this topic, maybe more often as we accomplish new goals.

Get it together-Monthly Bills. Write down a list of all the bills you pay out each month. No need for specifics just yet, we just want a general idea of how many bills are being paid each month. We are also only going to focus on the payment amount for the time being, in a later post we will create a list with the outstanding balances for loans. This list should include everything that you pay out each month. Mortgage/rent, phone, cable, utilities, auto loans, personal loans, gym membership, etc. You can use the list that we created here.

Non-monthly bills. One of the things that always hit us was the occasional bills that only roll in one a year, or once a quarter. We knew they would come, but we always just figured we would pay them with what we had when they came due and play catch-up with everything else. For our list we simplified everything down to a monthly cost. For us this includes home/auto insurance, property taxes, vehicle tags, and memberships to various professional organizations.

Once all these items have been recorded, it is a good idea to dedicate part of your dwelling to the storage and paying of bills. It takes only a small area, and the amount of psychological relief of having everything in it’s appointed place is well worth it. We use half of a 2’x4′ foldout table. It provides ample space for check writing as well as a location for a three drawer organizer to hold the bills, envelopes, stamps, etc. Having everything in one location will save us at least a hour a month that was previously spent looking for misplaced items necessary for bill payment. It will also help avoid mistakes.

We have a long list that is almost terrifying to look at. It can be discouraging to see things in this new light, but it will be worth it in the long run. Keep in mind that this is a journey. There is not a quick fix when it comes to getting out of debt. Our situation did not appear overnight, nor will it disappear in that fashion. It will take time, and sacrifice, in order to achieve the worthy goal of being free from the bondage of debt. Imagine what you would do if there were no bills to pay. That is what must be focused upon in order to stay on the right path. Proverbs 22:7 “…the borrower is servant to the lender.” How true that is. We may not be slaves to the actual lender, but debt does keep a lot of us tied to jobs that we despise just to pay the bills.

Did your list look like you thought it would? Do you have more or less than expected going out each month?

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