10 Tips To Help You Budget
Here are some tips and tricks that make it easier to control your spending
, pay down debt, and save for those big things in your future. A budget is a spending plan that includes everything you will spend money on.
A good budget is a spending plan that includes everything you will spend money on and stays within your income. A wise budget includes everything you will spend money on, savings for a 'rainy day', savings for large purchases, giving, savings for kids, and investment for retirement and still stays within your income.
Caution! No matter how detailed your spending plan is, if it does not include everything you spend money on, or, if it does not address where you will get the money to cover all your expenses, it is not a budget.
You might be wondering why you should even budget. If we don't budget, we lose control of our expenses and can't even figure out where the money went. Worse, yet...we can't figure out where we'll get the money to cover that big bill we forgot was coming.
Tip number one - Get the whole picture. Start by collecting all checking account and credit card statements for the last year. Collect all cash receipts for the last month (or next month if you don't do this). Don't forget cash spent on co-payments, mocha's, haircuts, etc.
Now collect all receipts for financial contributions to charity, including Girl Scout cookies, etc. Collect all pay stubs, deposit receipts, etc. Number two - Record the whole picture. Use all the stuff you collected to record a 'picture' of what you spent last year (use a pencil and have a big eraser on hand.)
Don't be surprised if this takes a lot of time with a calculator and scratch paper. Number three - Check off the lines on your documents as you account for them in a budget item. That way you don't put the same thing in more than one item and you don't forget anything.
Number four - Make a formula. Convert regular weekly pay to monthly: Weekly Pay x 4 = Monthly Pay. Convert bi-weekly pay to monthly: Bi-Weekly Pay x 2.167 = Monthly Pay. Convert annual totals to monthly amounts by dividing the total by 12.
Number five - If the insurance, however, is billed less often than monthly, the total annual amount would be divided by 12, and that number would be listed in the Impound Budget For Non-Monthly Expenses.
Don't forget to list the month it's due to be paid. Number seven - After you total everything, you may be surprised to discover your expenses are larger than your income. This is normal, though quite sad.
The amount your expenses exceed your income is the amount you add to your credit cards and other consumer credit balances every month If your income is larger than your expenses, the difference is the amount you can add to savings, etc.
Number eight - Review your budget worksheet to see if you can spot any errors, to try and find areas where you feel your spending is excessive, and to consider if any expenses (maintenance, insurance, taxes, etc.) will increase over the next year...make necessary adjustments and re-total.
Number nine - Make sure you keep a savings balance for a "rainy day" that matches 6 months of your net income. After you've accumulated that, you can begin investing and buying some of those things you just want.
Number ten - Giving or donating is as important as paying a bill. Give this a try! Sometimes when you put out abundance, it comes back to you. You should have an amount designated on your family budget for giving.
Even if you don't take part in a regular charity or church giving program, make giving part of your budget. There is a great deal of evidence, from 2,900 years ago right up to the present, that what you give comes back to you multiplied. Do it for a year and see what happens.
by: Jack Landry
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