Pick A Corner

Dear Dr. Per Cap,

I’m worried about my finances. I can’t keep track of monthly bills, and I never know how much I have in my bank account. I owe a lot on my credit cards and just can’t keep up. I make a good salary and have a monthly per-capita payment that helps, but I’m still in debt. I keep trying to get organized but it is too much. What should I do?

Too Much

Dear Too Much,

When I was a kid I kept all of my toys in the basement. I had shelves and a couple of toy boxes for storage, but sooner or later they’d all wind up on the floor. Let’s face it; taking toys out is a lot more fun than putting them away. Eventually I’d have to wade through a sea of action figures, Hot Wheels cars, plastic army men and Legos, which was no easy task for an eight-year-old. I still remember the advice my older sister gave me one afternoon when a pile of toys stretched across the entire basement floor: “Just pick a corner and get started.  If you break the mess down into smaller pieces, it’ll be a whole lot easier.” It was.

The same logic applies to taking control of your finances. It’s not uncommon to feel overwhelmed with paying rent, balancing the checkbook, planning a budget, paying off the credit card, and checking credit reports. Where’s a person supposed to start?  If you feel like you’re in so deep with your finances that it’s not even worth trying, it’s time to pick a corner.

Drawing up a monthly budget can be a real chore, and sticking to one can be even harder. So why not try a simpler approach?  Using a pocket-sized notebook, write down all of your expenses for one week. Fill up the gas tank, write it down.  Pay the cell phone bill, write it down. Frybread sale at lunch, you got it! Write down every dime you spend from Sunday through Saturday and then add it all up.  Adjusting to a budget can be a challenge, especially if you’ve never used one before. So this is a way to ease into it without biting off more than you can chew, just like you would if you were to go on a diet or start a new workout program.  You wouldn’t dream of running 10 miles on your first day, would you?

I promise that by taking this first simple step, you’ll learn something new about yourself and your spending habits – like how fast those Big Gulps add up!  But seriously, try this for a week or even a month before tackling a full-on budget or spending plan. You’ll be used to keeping track of expenses by that time, and won’t feel so overwhelmed by the extra responsibility. In fact you might even wonder how you ever managed to get along before.

Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. This content does not constitute professional and/or financial advice, and Dr. Per Cap is not a licensed investment advisor. To send a question to Dr. Per Cap, email askdrpercap@firstnations.org.