Money Management Help Part 2

Budgeting for Your Baby

How to Secure Your Finances

5 Online Tools to Help Budget Your Money

Great Budget Creation Secrets

5 Simple Budget Rules To Stay Debt Free

How to budget on an Irregular Income

What are the Main Causes of Debt?

Top Debt Tips in 2009 to Survive the Recession

Help for Single Mothers Who are in Debt

Get Back on Track with Budgeting Bootcamp

Get your finances in shape with our budgeting bootcamp. Find out how to make a budget and stick to it here.

Track Your Daily Expenses

You have to figure out where your money goes before you can establish a realistic budget. Ideally, you should keep track of every cent you spend for 1-2 months. The idea behind this is that if you have an unusually expensive or cheap week here or there, it won’t dramatically alter your budgeting forecast because it averages out. Buy a notebook and carry it with you at all times for the next two months. Date each page and record everything you spend, including checks you write, ATM withdrawals, etc. Keep receipts to make recording easier if you can’t record the expense immediately. At the end of the two months, make a list of quarterly, seasonal, annual, or semi-annual expenses that were not included in your two-month tracking experiment. This might include car insurance payments, property taxes, holiday gifts, etc.

Add Up Your Income

What you spend is only half of your budget; what you earn completes the picture. List all the jobs you have for which you receive wages or a salary. Also include sales commissions, if applicable. Include other sources of income, such as bonus pay, alimony/child support, government assistance, dividends or interest, and/or pension/retirement income. Next to each income source, write the net amount you receive each pay period. If the amount varies, average out the last dozen pay periods or so.

Create Your Budget

After tracking income and expenses for several months, you can now create your budget. As you do so, remember the two primary goals of budgeting: to curb overspending and to begin saving money. Follow these steps:

1. Categorize your expenses.

   Based on your two-month tracking period, make categories under which your expenses fall. For the categories you establish, add up your total expenses for each during the two months you kept track.

2. Project your monthly expenses for the next 12 months.

   For each of your categories, project your monthly expenses for the next year (remember to include your list of semi-annual, annual, and seasonal expenses).

3. Project your monthly income for the next 12 months.

   Just like you did with your expenses, include your projected monthly income below your projected expenses based on your 2-month tracking experiment.

4. Compute the different between income and expenses.

   If your expenses outstrip your income, you will either need to spend less or earn more. Try to figure out ways you can trim expenses here and there - you’d be surprised how small changes can add up. Also consider other ways you can supplement your income.