What can’t an excellent old SBAR report not help to solve or communicate? For those new to SBAR, SBAR stands for Situation, Background, Assessment, and Recommendation. With 203192974238470 different ways to look at your budget, the last thing you need to do is complicate it. Let’s break it down to the basics. You don’t need a 5 page Excel spreadsheet to take a look at your finances. Use something you are familiar with to break down your finances and implement a plan!
Situation
Clearly and BRIEFLY describe your current financial situation.
Are you struggling to pay your bills on time? Are you frustrated by having to live paycheck to paycheck? Debt has you down? High-interest rates killing your soul? Write down right now briefly what your current financial situation is. How easy was that? No 5 page Excel spreadsheet to determine what is going on.
Background
Okay, not that we know what the financial situation is now we can provide clear and relevant information on the situation that will help us develop our plan, but first, we need to look at the etiology of our situation.
Now write down your average monthly income, subtract your monthly bills, and look at what you have left over. Are you shocked? You are either going okay, I did not include enough of what I consider to be bills, and have too much money left over, or are barely squeaking by every month.
Now before you move on, let’s look at financial stability trends. Where is your current debt at? If you didn’t already include your debt payments, including credits cards, personal loans, and student loans, make sure to subtract this from your monthly income.
What is your total now?
If you don’t have more than one income stream, you are living on a fixed income. There are ways to optimize a fixed income, such as optimizing your taxable income. However, most of the time, one income stream will not be enough for you to comfortably get by if you have any significant debt or revolving debt.
So one more time, look at what you have leftover; how does this make you feel?
Are you wondering where all your money is going? I challenge you now to look into your checking account and total up everything you spent in the past month to see exactly where your money went into different categories, where your money goes, where your priorities are, what are you making financial priorities, and does this line up with your financial goals? If not, you have some adjustments to make.
Do you have enough income to get by with your bills that doesn’t leave you any room for extras? You should look at all of the bills coming out, can you ask for discounts on any of them? Refinance for better interest rates to save money? Are you paying for subscriptions that you don’t actually use? On that note, don’t forget to look at your apple subscriptions to see how much money you are spending on monthly apps.
You will find that it is an accumulation of all of the smaller (not so expensive) purchases that will get you in the end.
Assessment
Okay, you have looked at your situation, discussed and analyzed your background, not it is time to make an assessment based on your situation and background.
My assessment of my financial situation is that… [fill in the blank].
Are you broke? Are you just getting by? Do you have bad spending habits? What is your conclusion based on what you have just looked at?
Recommendations
The last part of the SBAR is a recommendation: what do you need from yourself and your spouse to succeed financially?
Sit down and have a financial meeting of the minds in your household, if it’s just you scheduled at least 30-60 min with yourself to take a hard and honest look at your spending in the past month and multiply that by how many months have already gone by this year, there is SOOO much better things you could be doing with your money.
This is where you make a decision, do you have to start tackling your debt? Starting with loans you took from parents and your high interest credit card debt? Probably, most of us have to start here. Once we can get ahead of our consumer debt, it gives us a sense of control and a small taste of financial wins.
You have the power to control your finances. Stop letting your finances control you. The longer you put them off, the more money you are going to waste.
