Budgeting

Everyone has an opinion when it comes to budgeting your money, from your parents to your friends to Uncle Charlie. They all want to tell you how to spend you money and how to handle it, but unless you sit down yourself and work out a monthly budget it will be tough to get anywhere financially. The best financial advice anyone can give you is to work out a realistic budget on your own.

It can be tough to sit down and realistically look at income, expenses and the shortfall you may be facing each month. You would be surprised to see the number of people balancing mortgages, car payments and negotiating debt of huge proportions, but have never actually sat down to look at their real financial picture. When families have 2 income earners working 50-60 hours a week and trying to balance other household concerns, it can seem unfair that the end of the month comes and there isn't enough cash to pay all of the obligations.

If you don't actually sit down and map out your finances, you will never gain control over spending and may end up in an untenable situation quicker than you realize. The first thing you need to fully understand is where all of your money is going. Everyone experiences times when expenses outweigh income, but if this becomes a pattern, a true assessment of spending is necessary. You are not like the federal government, there is no such thing as deficit spending on a personal level and we don't have the ability to print money from our basement. At least you shouldn't...

Working out a budget can take a little time, and can be somewhat uncomfortable to face, but it is necessary in order to get finances in order. The first step in designing a budget is listing all sources of income- salary, investments, etc. The next step is to list all expenses that are fixed amounts such as rent, cable, cell phone, closed end loans with fixed payments like autos, insurance and the like. Following that should be a list of recurring bills that are variable such as utilities or credit cards. Last you need to detail any entertainment or discretionary expenses like clothing, movies or dinners out.

Now you need to keep yourself honest. Balance this list against your check register or last few checking statements to make sure you have included everything. For the items that weren't included, ask yourself if they are necessary and whether you were aware you were spending those amounts. You could be surprised at how many other expenses show up that simply weren't accounted for when working up your budget in your head. Grabbing lunch while at work, or picking up dinner on the way home, eating out and other entertainment expenses may feel justified at the moment, but can be quickly forgotten when it comes time to pay the bills.


Could you bring lunch to work instead of picking something up while there? Could you be eating at home more often? Do you need to have the latest DVD release on every movie that comes out? Add up these expenses over the last month or two and you can quickly realize what your potential savings could be. It may take a little lifestyle adjustment to give up these things, but the amount saved can quickly comfort those sorrows.

Not many people will take the time to sit down and work out a monthly budget, and fewer still will stick to it. But once you can implement this practice, it becomes so much easier to live within your means and negotiating debt can become a breeze. You may even find the money you needed to start saving for retirement or your child's college education. If you need help with setting budgets or working with your creditors to manage your bills, visit the DebtMa Corp website for additional tips and sign up for a FREE financial consultation.