- The Three bs
- Budget Aids
- Two Motivations for Buying
- Buyer's Homework
- Shopping Prices
- Negotiating a Better Deal
- Common Sense Borrowing
- The Bonus "B"
- Big Hat No Cattle
- Ask for Free Stuff!
- The Debt Book
So you want to take control of your spending? Good. Here are Five Common Sense Steps to establishing a personal budget.
First Track what you spend. For one month keep track of all your expenses. Write down everything from your morning stop at the coffee shop to your monthly mortgage. Write down any impulse purchases no matter how small or large. At the end of one month you will be able to categorize your basic spending and measure this against your income. This will become the basis for your budget.
Second Determine your financial goals. Decide where you want to be one year, two years and five years from now financially. List the dreams and goals you have. Do you want to take vacations, save for your children’s education, purchase a house? Remember it will take money for you to achieve these goals so you want to look at them realistically so you will know how to budget in order to achieve the goals.
Third You want to list what you owe. Paying off debt can be tricky. Different debt carries different interest rates. You want to prioritize your debt payments so you can take control of lowering expenses quickly. This will also help you feel in control when negotiating with those whom you owe. When you understand your own priorities you will be much more confident to ask for what you need and not accept anything less.
Fourth You want to choose how much you will save. Saving is a vital habit too few develop. Add up your expenses, add ten percent to this figure, then you have your pool that you can work with for savings. A good figure to work toward is ten to twenty-five percent of your earnings. For most people ten percent will be all they can afford and this is ok. What is important is to develop a habit for putting money aside. You can even save specifically. You can designate five percent to your children’s education, two percent to emergencies and three percent to the annual family vacation.
Fifth You want to revise your budget regularly. Things change. Hopefully you get a raise and need to increase your savings. Or you may fall on difficult times and need to be honest with yourself about decreasing savings for a period of time and maybe getting rid of some things you no longer “need.”