Creating a budget can be a very difficult task. Although we as consumers know that we need to pay our bills, buy our necessities, and put money away for savings, we don't really know how to start.
I know from personal experience how hard creating a budget can be. In the beginning stages of my road to financial freedom, I would write all my expenses down on paper and noticed that I had little and sometime nothing left over to save. I tell my clients that seeing everything on paper is only the first of many reality checks while getting their finances in order.
I think all advisors in the financial world can agree that using categories helps tremendously. Everyone will not have the same categories thus making every budget unique.
A category simply is nothing more than a grouping. Instead of listing each credit card bill separately on my budget, I will give all of my credit cards a category, for example I will list it as "debt". Some popular budgeting categories are housing, savings, utilities, donations, healthcare, miscellaneous and income to name a few.
There are many budgeting software programs out there. I suggest however, that in the beginning stages of creating a budget you should continue to do things manually. This way you are constantly viewing your money and staying in touch with your expenses.
Another very important task of a successful budget is keeping up with your expenses and all of your receipts. Now, I know this is difficult especially when buying what we think are small things but believe me it is very significant, especially for married couples. If one spouse is spending over $4.00 a day 7 days a week on a cappuccino, that one purchase is costing your household $120.00 a month. To help solve this difficult task, keep a box in a common area and commit to tossing all your daily receipts in that particular box. When you sit down to work on your budget pull out all the receipts and categorize them. I suggest you do this weekly in the beginning. The box can fill up pretty quickly, especially when two people are contributing their individual receipts.
Last but not least place your categories in a percentage list. For example look at your life in the eyes of a lender. You should spend no more than 35% of your gross income on rent or a mortgage payment including tax and insurance. If you're spending more than 35% adjust your budget according to your true picture. However the total of all your categories cannot exceed 100%. Once you tally-up your actual budgeting totals, compare them to your translated percentage dollar amounts and see how you rate. Most will find out that they have a lot of work to do.
If you find that creating and sticking to a budget is overwhelming, seek the help of a professional.
Dina D. Harbour, Financial Coach
info@wanteddebtoralive.org (or visit)
www.wanteddebtoralive.org
All Rights Reserved
Financial Management Experience:
Since 1986 Dina has taken an interest in the financial world. Starting her career as a Loan Clerk she quickly learned the importance of establishing good credit. After examining and improving her own financial situation she began to do research on minority lending in efforts to understand the reasons why minorities have the lowest approval rates for home loans. Her findings sparked a desire to share with others what she learned.
Since that time, she has worked as a Loan Closer for the SBA, Loan Officer for ACORN Housing, Trust Assistant for Wells Fargo Bank, and successfully won a $5000 laws suit against Equifax Credit Bureau in 2002 for reporting improper credit information. She has over 18 years experience helping people understand the importance of debt and credit. She has given many seminars over the years to Non-Profit Organizations, Libraries and private groups.
Culver prom limo ..Identity theft is a serious crime that continues to grow.... Read More
Despite how easy it is to balance a checkbook, very... Read More
Most of us, especially those of us who have debtor's... Read More
If You Have an Existing Account and 5 Minutes, You... Read More
Traditional checks probably won't disappear anytime soon, but processing checks... Read More
One of the simplest ways to improve your professional image... Read More
Have you ever thought about what you are going to... Read More
I've been sharing the following idea with people for a... Read More
Millions of people give a lot of thought to financial... Read More
Each of us knows how to spend money, but do... Read More
It is crucial as an individual who is striving for... Read More
Are you having problems with debt? Are you afraid to... Read More
I've been going through and interesting growth period lately that... Read More
Finding a stable and secure income that will come year... Read More
With the A-level results coming out, the long wait for... Read More
Sorting out your personal finances can be a tricky and... Read More
It doesn't take much for you to get behind on... Read More
It's the little things in life that make it interesting.... Read More
If you were to ask 100 women "What would you... Read More
If you've developed a household budget to get your spending... Read More
We all know that money doesn't grow on trees, but... Read More
It is widely written that you need 75% of your... Read More
The judge had to ask the question, and we had... Read More
Shopping for groceries is an inevitable fact of our ever... Read More
If you have a 401(k) account, it can be very... Read More
Wood Dale limo ..Next to our physical health most of us are primarily... Read More
Confused about whether you can contribute to a Roth IRA?... Read More
Our global society has had a wake up call in... Read More
The first step to financial success lies in knowing your... Read More
Commonly referred to as the first of the three major... Read More
Do you have a 401(k) retirement account? Are you vested... Read More
Recent security breaches at several credit card companies continue to... Read More
While 40% to 50% of us make New Year's resolutions... Read More
The cries are heard from the distance, "I need help... Read More
If you are the normal consumer, then you've probably experienced... Read More
Sticking to a budget can be difficult, but with so... Read More
Reducing the clothing budget was a serious challenge for me.... Read More
Has anyone been to the gas pumps lately? Soon $3... Read More
If You Have an Existing Account and 5 Minutes, You... Read More
Women have a love/hate relationship with money. Most of us... Read More
To save on food, be an opportunist. Buy what you... Read More
Well, dang! From what I've heard and read, it looks... Read More
This investment retirement account (IRA) is useful to you as... Read More
On the other hand, there are those people who are... Read More
Many people graduate from college owing thousands of dollars in... Read More
It doesn't take much for you to get behind on... Read More
Are you a check fanatic? Don't worry, you aren't alone.... Read More
You should thoroughly consider your business needs when selecting a... Read More
Now there are ways to save money in the grocery... Read More
It is widely written that you need 75% of your... Read More
Personal Finance |