CREATING A BUDGET
Controlling and managing your
debt is one of the most important
things you can do to help you
recognize where your hard earned
money is being spent. Determining
where you can tighten your spending
habits is equally important. These
practices are called budgeting.
Budgets can be cruel, but they are
absolutely necessary! They are the
only way that you are going to know
roughly how much money you are
going to spend and what you are
spending on. A budget will ensure
that you are not wasting money when
you don't have to, and saving money
when you can.
More reasons why budgeting is a
Three main factors to consider
when developing your budget:
how you are currently spending your
spending goals. Meaning, set a goal
for saving money for a house,
paying off debt, etc..
3) Keep close
tabs on your post-budget
development spending to make sure
that you are sticking to the
Utilize software for tracking
Microsoft Money and
great programs that will help you
create a budget and track your
Donít be a penny pincher!
It is very important to save.
Cutting corners here and there is
OK. However, you will end up
driving yourself crazy if you look
to be a cheapskate with everything.
A good idea is to focus on a few
major areas where you can cut-back
spending. Just be financial wise in
your decision making and the other
savings will follow!
Keep track of your cash
Doing this will allow you to
track exactly where your cash is
being spent and if you will need to
make adjustments on your spending
in certain areas.
Don't spend more than you make!
Debt does not happen without a
reason! If you are spending more
money than you earn, you will need
to consider making some serious
Don't buy what you don't need!
When setting up your budget,
determine what your needs are and
what your wants are. For example,
if you are buying new shoes, do you
need the same pair in a different
color? Or is the one pair fine.
Set a goal of spending no more
than 85% of your salary. If you
have direct deposit, put away 15%
of your salary into savings as soon
as you get it. If you do not have
direct deposit, you can put money
every week into a savings account.
Or, you can invest some money in
short-term CDs. Developing a
financial plan for saving is
one of the most important
aspects of budgeting.
Donít rely on money you do not
When determining how much money
you have, do not include bonuses,
judgments, tax refunds etc.. This
money is not yours until you are
actually in possession of it. As we
all know, things happen that are
beyond our control that can
negatively affect you receiving
this money. You never know!
Use a raise wisely!
Just because earn more money
via a new raise, that does not mean
that you have to spend more money.
In fact, you should try and save
this extra money for an emergency,
retirement or special purpose. You
are already used to your old
income, so contributing more
towards an type of savings is not
going to put a strain on your
We also suggest that you read the
section related to
-Taking Control of Your Finances
-What Causes Debt?
-Credit Card Interest Calculator
-Auto Saving Guide