A really important step to taking your debt in hand is to sit down and create your Statement of Affairs (SOA).
Statement of Affairs (SOA) and Why You Need One!
What is a Statement of Affairs?
Simply put, a Statement of Affairs is a list of all your incomings and all your outgoings. This will allow you to see exactly how much money you have coming in each month and how much you are spending. If you have more money leaving your hands than entering, this will be the cause of your debt.
How does it work?
You simply input list your income and outgoings to work how much money you should have left at the end of the month. It is really important that you ensure you include all your outgoings so that you have a true picture.
Why YOU need a Statement of Affairs
A Statement of Affairs is crucial to understanding exactly where your money goes. It will give you total awareness of what you are spending, where you are spending it and when you are spending. Once you can see where your money is going you can use this information in a number of ways:
- Do you need to cut back in some areas (eg nights out)?
- Do you have any money available to make extra loan repayments?
- Are there any outgoings that you can cancel (eg subscriptions etc)
When I created my own Statement of Affairs, it revealed spending that I didn’t consciously realise I was doing. That extra mid-week shop, that odd cup of coffee, the new top I thought I deserved – they all added up. They were eating into any remaining money I had each month and pushing me into debt.
Once I created my Statement of Affairs I could see exactly where my money was going and the areas I needed to improve on. Without this, I would have just continued getting further into debt.
Would you like to be featured on Money Saving Journeys?
|Would you like to be featured on Real Life Debt Stories I am looking to share 'real' stories of people who either have been or are in debt. I want to share these to show that if you are in debt you are not alone. Any stories shared can either be completely confidential, or if you are a blogger, you could include a link to your blog or website. If you would like to contribute, please complete this questionnaire. I will email you to let you know when your story will go live.|
Other Posts from Money Saving Journeys: