Are you in Financial Shape?

Are you in Shape Financially?Are you in Financial Shape?

Most people want to be physically fit. Many people also need to be financially fit but do not know how to start.

Start Today

Make a list of all your assets (at today’s value) and a list of your debts. If your asset value is higher than the total of your debts this is a positive Net Worth. If your debts are higher than your assets then your Net Worth is in deficit. This only means that you will have to work a little harder to get where you want to be. 

Track your spending

Review your last three or four bank statements, especially if you do most of your spending using a debit card. Track your cash each day for at least one week. Don’t be shy; you don’t have to tell anyone. At first you should just be aware of your spending. 

Make a pre-budget

Using your bank statements and cash records, make a list of everything you spend each month. There are lots of free software programs that will help make this easier. Again, first, be aware of your spending.

Make a real budget

Once you have a few months of spending tracking, you are ready to build a budget. Use the categories you have from your pre-budget, and make it official.

You probably already know if you are spending more than you earn. It is up to you to recognize that you have only two options: cap the amount that you spend, or find a way to increase your income, e.g. by getting a part-time job. One tell-tale sign of over-spending is your credit card statement. If you are using the card to buy things you have don’t have the cash to buy, you could be setting yourself up for future trouble.

Adjust your a budget by reducing expenses just a little in each category so that your spending matches your income. You probably won’t notice the change.

Once you are comfortable with following the budget, try to cut back a little more so that you will have a small surplus each month. That right there is your savings. This can be used for emergencies if they occur.

The Rainy Day Fund

Once you are able to set aside a little bit of money each month, open a savings account and transfer that surplus automatically into your savings account directly from your paycheque. You have just started your own personal savings plan.

This money can be used for a short-term Rainy Day Fund to pay for those surprises that seem to come up so often. For the long term, consider a Registered Savings Plan or other investment for your future. Make sure the amount you put in your Rainy Day Fund is part of your budget.


Carl Rumanek is a principle with Rumanek & Company Ltd., Trustee in Bankruptcy, Administrators of Proposals & Debt Consolidation Programs.

He may be reached by E-mail at or by telephone at 416-665-3328.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.  

Read more from our blog