Winning at money is 80 percent behavior and 20 percent head knowledge. Most of us know what to do but we just don't do it.

Dave Ramsey

budget icon.jpgNow that I'm officially an empty-nester, I have to sit back and review my financial situation. My income has been reduced by about $7,800 per year now that my son has moved out and stopped paying rent. Add to that an additional $7,800 per year that I lost last November when my daughter moved out and joined the Army. That's $15,600 in annual income lost in the last 5 months. Ouch!

Yes, my expenses have also gone down … for food and utilities. Unfortunately, my mortgage payment, real estate taxes, and homeowner's insurance have not. Neither has my cable/internet bill – unlike other utilities, that one is fixed regardless of how many people are using it for how long. So mostly, my savings come from buying less food, water and electricity. I still have a car payment, credit card payments, a student loan payment, and car insurance that have to be paid every month.

I'm not panicked (yet), but clearly steps will need to be taken to reduce some other expenses to make up for this sudden cut in income. Alternatively, I could find a second job (this prospect does not appeal to me, but it may prove to be necessary).

I've already completed STEP ONE: The credit cards have been cut in half and thrown away. They're like crack cocaine to me … have credit will purchase. No more.

I've purchased some simple, inexpensive (but effective) budgeting software (YNAB), found some Personal Finance Blogs for motivation, and I'm now on the road to financial equilibrium. This is sure to become a favorite blogging topic, because I see it being a major focus in my life for the foreseeable future. I've added some new links to the bottom of the left-hand column on this blog, for anyone wanting to take the journey with me. By making this a public journey (via this blog), I'm hoping my pride will motivate me to stay on track. I sure don't want all my (several) loyal readers to find out that I've failed.