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The mere mention of the term budgeting is enough to spur unease among many. Budgeting as in cutting down on expenses? Living without the things we’re used to having? The answer is not just a simple YES; budgeting is so much more than the negative connotation you perceive it to be. A lot of people think of budgeting as synonymous to living cheap when the truth is, it’s really about how you stretch your dollar. You may even rationalize your spending with the justification that you are earning enough (maybe more) to cover your spending spree, but it’s not about how much money you make; the bottom line of budgeting is how much of your hard earned bucks you get to KEEP!

Sure, you can still buy the things you need and want to make for a comfortable living; you just have to plan for it. Now that entails keeping track of where your money goes and how much you spend for each item (food, groceries, gas, clothes, etc.). You may bemoan the fact that there are so many categories to consider, it would be hard to trail your expense activity for individual expenditure. Not if you adhere to these 10 easy-to-follow budgeting tips that this article suggests.

• Be clear on how much you make. Start by putting together a list of your income. Now this may not be as straightforward as just looking at your annual salary and dividing it by 12 to get your monthly income. If your yearly pay is $60,000 it is likely to get knocked down by roughly $10,000 in income taxes, with the likelihood of dropping even lower when you consider other upfront costs for work benefits, such as health insurance, for example. With that scenario, it is quite inaccurate to use $5,000 per month as your baseline for your budget; $4,000 is close but less than that is a more realistic approximation. It is therefore prudent to know your exact take-home pay. If you have other sources of income besides your paycheck that you use for monthly expenses as well, you can include them on the list. Remember, the total of these figures will serve as your framework number when you draw up your budget.
• List down every single item you spend your money on. It’s a bit tough but don’t miss out anything. If you’re uncertain, go for an educated guess. Stick to more familiar and identifiable listings first and classify them into “categories” (e.g., Utilities, car payment, rent/mortgage, insurance, etc.) Get the picture? You can build up the specifics or re-categorize the items as you go along. You may want to separate items in a category that appears to have an overwhelmingly huge amount as the “Utilities”, for instance – you can break it down into Gas, Electricity, and Water. It may take you over a month to get the hang of it and become better at giving approximations to some categories. Your first budget may not even actually be a budget; but you’re in the right track if it reflects your spending pattern in a typical month.
• Make room for incidentals and non-recurring or irregular expenses. There are bills that don’t occur on a regular basis and you shouldn’t be “caught off-guard” like they’re unexpected surprises. Make sure you consider expenses that are incurred only once a year (i.e., property taxes, car insurance, homeowners’ insurance, car licenses, and so on). Likewise, provide figures for such expenses as car maintenance, vacations, birthdays, holiday presents, weddings and similar items. They may not occur every month but they sure could get your budget plans busted. Keep in mind that it’s not the regular routine expenses that could wreak havoc on your budget; it’s these “Gotcha!” bits and pieces.
• Come up with a List of Comparisons. Have three columns for this list: 1) items with preset costs (you can’t change them); 2) items you can change but don’t have better deals; and 3) items that you’d be happy to change and would most likely find better alternatives. Mark items on your budget that you think you can purchase cheaper and shop around to research for options; you had better be good at comparing prices.
• Cut down costs by spending less. Check out items on your budget that you can reasonably cut down. That’s not saying you have to totally cut them out; just find ways to trim down the amounts you spend on those items. You can perhaps take public transport to work every so often; you can certainly slash some on fuel costs.
• Curb the compulsion to spend money on anything “unnecessary”. Figure out the amount you need to survive and how much is wasted on frivolous expenses. Impulsive buying may give you a momentary emotional lift but you are bound to regret it later when you see the “dent” it makes on your budget. In short: if you can’t find it on your list, that means you don’t need it; put it back on the shelf!
• Bring your debt down to a workable amount. Figure out the amount of debt you really owe. Sure it’s daunting; even agonizing to realize that you have perhaps let things slide a little too far, but you have to face up to it. Minimum payments may not even cut it. Try to pay (maybe double or more) as much as you can every month to feel any significant progress. Direct debit payments often decrease the amount paid each month; find out which of your monthly payments could be reduced by simply instructing your bank to implement direct debit arrangement. In the long haul, you’ll appreciate how much of a giant leap it is towards relieving yourself of debt stress.
• Be on the lookout for those killer interest costs. Interest fees and charges can inflate your debt exponentially. Look around for alternatives with lower charges on balance transfers or explore the possibility of requesting your current lenders to reduce some of their charges. And don’t even think of defaulting on your bills; a better move would be to ask for payment plans instead.
• Work and build up savings into the budget. Isn’t one of your ultimate budget goals to save or invest part of your income? Of course, it is! True, it’s not an easy feat to save money when you’re working on a budget, but think of it as paying yourself first; much like what the IRS does with your paycheck. Set aside the amount right off the bat and think of it as “untouchable”; no discretionary condition and non-negotiable. Move the amount into a savings or mutual fund account straight away before you get lured to spend it on something else. Remember those “incidentals” you set aside? You can actually put them into savings to help build up your credit (you just draw it out if needed). You’d be amazed at how building up your savings can significantly make a difference down the road.
• Set up a budget for temptations as a reward to yourself. Oh yes, you deserve it! Budgeting need not be an off-putting, excruciating experience. Once you’ve reached some of your short-term goals, you can stop a bit on your budget journey and smell the roses along the way. Sure, you can set aside a portion and use it for fun things (or frivolous expense, for that matter). It’ll actually help gratify temptations without setting off mindless budget binge. A word of caution, though: just make sure your rewards don’t screw up your budget!

To Wrap It Up…

Easy-to-follow may not exactly be an apt term because budgeting needs a lot of conviction and the right mindset to stick it out. Budgeting can be quite difficult, but it’s indispensable in today’s dire economic situation. The importance of budgeting can never be over-emphasized; especially in the modern world where all sorts of temptations are just lurking around the bend, ready to strip you of your hard-earned money.

There are plenty of versions for budgeting tips and not all of them may apply similarly in all situations; what’s important is for you to identify what works for your financial circumstances and lifestyle. Once you work out a suitable budget and keep it on track, it becomes habitual and you’d be amazed at the thrill that “a dollar saved against a dollar spent” can bring. Financial freedom is an attractive thing that holds so much potential power. Take the first step to gain this power by cultivating your budgeting skills. Make a plan that you can realistically stick to – it’s the only way to create a positive opportunity for building financial security into the future.

Impulse buying is like a quick spreading disease. It is one of the easiest ways of throwing your hard earn money on things that you really do not need. If your personal goal in life is to be financially successful this is a habit that you can do without. Some people say that impulse buying is like a form of addiction. Many people when they feel stressed whether it is work related would turn to shopping as a way to relieve their pressures in life. During times of depression do you often turn to shopping for solace? If you find yourself fitting this description then there is still hope for you. Write the things that bother you and look over your list to see which ones you can change, which are those you can handle or which one you can resolve at a later date. When you often do impulse buying the end result is either financial problem or financial disaster.

Here are helpful suggestions for you to stop impulse buying:

1. Set a financial goal. Write down your specific financial goal in one, five and ten years’ time. Do you like to have a new house? Complete payment for your child’s educational plan? Having something to hope for can help you to focus on what is really important in your life.
2. Where does your money go specifically? Go over your check book for the last few months. Look at your list, paying special attention to those items that you bought on a whim. Chances are these are items that you really don’t need. The simple solution is to live within your means. Stop buying things that you don’t need.
3. Do not treat shopping as a hobby or else you will find yourself justifying your actions.
4. Shop with cash only for the things on your list. Do not take your credit card with you in that way you will not buy anything that is not in your budget.
5. Avoid the aisles which cause you to spend on items you don’t need. If you have your child with you better ask her to get the item on the list for you, in this way you can avoid temptation to spend on things such as those promotional items. You can also teach your child to be your accountability partner ( somebody who will remind you to stick on your list).
6. Avoid looking at mail order catalogs. If you subscribing to this better removed your subscription.
7. Stay away from spendthrift friends. Do not go to the mall just to hang out. Suggest other activities instead without spending beyond your means.
8. Make sure that if you are planning on buying a big ticket item research it well so that you can get the best value for your money. There are online reviews that can be helpful.
9. If you are thinking of spending on something that you are craving for place it on a list with a date in it then after a month check on whether you still think you need it but most of the time you might be surprise to find out that you really do not need this.
10. Learn from smoking quitters. If you find something that you want to buy. Walk away and do something else for 5 minutes. A little later you will find out that you already forgot about it.
11. Be careful on what you see in the internet or in your TV. There are plenty of advertisements that subliminally will encourage you to buy items that are “the best deal for you”. These might be things that you already have. Buy only items that needs to be replaced.
12. Try to find creative ways of rewarding your efforts without spending.

Do you have a monthly budget?  Many people do not and this is why they get into massive credit card debt, and their finances go down the drain.  By planning your spending you can really save yourself from financial turmoil. Here are seven tips to get you on your way to a working monthly budget:

• Know where you are. It is vital that you know where you are money-wise before you can create a monthly budget. This entails documenting all your income sources, what you consider you can spend on expenses monthly, and listing your creditors and your debt to them. This way, you get a better understanding of how your finances stand.  You finances aren’t going to get any better if you just keep ignoring them.  I did this for years, but got a solid budget plan and more importantly a piece of mind.
• Track your spending. Tracking your spending for about 30 days before creating your budget will give you the concrete figures of your actual spending in each expense category monthly. Many people are surprised to see the small purchases add up at the month’s end. If you know how much you typically spend in each category, you can then plan your expenses for the coming month.
• Reserve some for savings. Something is better than nothing! It is always good to plan to save some money each month. This can be the start of an emergency fund, so when unexpected things like emergencies come your way, there’s no need to depend on your credit card. This is very important for keeping yourself out of debt.
• Plan for periodic expenses. When you’re creating a monthly budget that should really work, plan ahead for periodic expenses like car insurance (if this is not paid monthly), annual car registration, school shopping, Christmas gift giving, and insurance deductibles, to name a few. If you estimate the yearly expenses then divide by 12, you will have the amount you can save monthly for the various expenses.
• Write your needs/wants on a worksheet. As the members of your family express their needs and wants, you can record them on a needs and wants worksheet. This will help you all to spend intelligently when money becomes available, instead of making impulsive buys, but forgetting what’s really essential or needed.  Rank your needs and wants in order of importance, too.
• Use the right worksheets. When creating your budget, be sure to use worksheets with all the information you’ll need for a working budget. The worksheets should include a means for tracking spending, repayment of debts, monthly financial reports, and monthly budget worksheets. These will allow you to see all the information you need for a working budget, and show expense categories where you need to adjust for a balanced budget.
• Do not forget your tithes and offerings. In this time and age, people cannot forget their wants and needs, but do not set aside what should be their first priority. When creating your monthly budget, many fail to realize that there is more in this world than working and spending. This is the number one cause of most failing budgets. Always keep track of both spending and giving allocations. Even if money is tight, there’s no reason why you cannot do this.

Creating a personal budget is the most important thing you can do to bring financial freedom and you a peace of mind so you can be in control.
In essence, it’s like if you can’t earn more, then learn how to spend less, and be a smart spender. Make a budget. Here are 6 reasons you need to establish one:

• Control. Without a budget, money could end up controlling you. You should understand where you plan your money to be going, how much you need to spend and when these are available, and you’ll be in control. When you have your spending written down, you’ll also have an idea of your cash flow. So you can manage your money to realize plans and develop your financial skills.
• Prevents overspending. No matter what you do or how much your earnings are, managing your cash flow is important to avoid overspending. Normally, the higher your earnings, the more you spend. However, credit cards can tempt us to spend more money then we actually have. Spending expands to embrace increases in income, so it is very important to take control. When there’s a drop in income, be more aware of your spending so you do not end up in debt. It is not so much how much you earn, but how you manage your funds that matters.
• Provide a ‘snapshot’ of your financial situation. As you take note of your incomes received and expenses, you’ll know when to make changes to keep up your budget. It helps you to keep on track, so if you’re spending more than you make, you should start to spend less.
• Helps you economize and set goals. A budget gives you an idea of how much you can allot for certain goals. For example, if you want to pay off a credit card within the year, you know how much you have available, and what you can do. If you made a commitment to make it work, the budget becomes your tool to help you keep on track.
• Helps you deal with financial emergencies. Having a reasonable budget will help you be prepared for sudden unforeseen expenses that crop up. Believe me it is a smart idea to start a savings account and put money away for car repairs, hospital visits, ect. Emergencies pop up all the time and it gives you a piece of mind when you are prepared.
• Enjoy being debt-free. Budgeting shows ways you can increase savings and how you can use the excess to pay off debts quickly. In fact, a budget is the best tool you can have to stay out of debt.

All it takes is some commitment and effort to get you on a financially free everyday life through establishing a personal budget. Make sure you make a goals to put money in your savings every week or month and you will slowly start to get more financially secure.

When faced with a seemingly indomitable amount of debt, debtors must consider debt management. The goal of debt management is to help debtors recover from being totally devastated with the consequences of their debt. Debtors can take advantage of individualized assistance in creating a repayment plan that is especially drafted according to their available resources. In addition, they would be guided in reassessing their misinformed concepts of debts plus examine inherent flaws in their credit management strategies.

One of the stages to debt management is credit counseling. Debtors would be working with certified credit counselors from credit counseling agencies. These agencies are generally non-profit agencies, whose main task is just to help people with their debt burden through developing good credit management strategies. They are non-commission based as monetary remuneration is perceived to influence negatively the quality of assistance provided by debt counselors. To get a list of trusted credit counseling agencies, you may seek the guidance of the National Foundation for Credit Counseling (NFCC) or its members like the Consumer Credit Counseling Services (CCCS).

Once you have a debt counselor, expect that you will undergo counseling. This stage is a pre-requisite for people contemplating on filing bankruptcy. In fact, it is recommended that petitioners would undergo counseling at least 180 days before filing. It is only under emergency situation or when trustees of the court find strong evidence that the approved agencies have grown incompetent in providing counseling, will the debtor be excused from counseling. This program is useful for people who are planning to execute a petition for bankruptcy as they will benefit from the debt settlement plan. Other consumers may also find the program useful for learning ways to make proper use of credit, prepare a workable household budget, means to increase savings, and develop a debt repayment schedule to discharge a growing debt.

The next stage in debt management is a voluntary enrollment into the debt management program. The intent of this stage is to follow through on the repayment schedule and make sure that it is fulfilled. Other tasks of credit counseling agencies include negotiating with creditors to lower the monthly payments. They would usually open a new credit line which will serve as a debt consolidation loan. At times, they would suggest having open-ended accounts i.e. credit cards re-aged.

Re-aging is defined as a process of relabeling an account as current, only as a status of the account, but still the debtor is accountable to settle the dues. Re-aging may be done by at least making three successive monthly payments or by paying an equivalent lump sum payment, and continuing on with the monthly repayment schedule until the account’s outstanding balance falls below the pre-delinquency credit limit. Take note that creditors are only permitted to re-age open-ended accounts once in a 12-month period and twice in a 5-year period. Re-aging of an account would also deter one from getting a new line of credit. With these measures set-up by debt management, debtors are freed from getting high late fees that accrue and burdens them.

When it comes to the debtor’s credit score, debt management impacts positively the credit standing. Since re-aging converts the account status to current, credit scores would begin to pick up since the negative marking have been lifted. Recovering debts through debt consolidation, in the perspective of lenders, is the best option for debtors who had defaulted 5 months or more. Another alternative is through labeling the debt as non-collectible. The difference is on the rating. Bad debts give the debtor a credit rating of R9/I9, repossession cause a rating of R8/I8 while consolidation results to an R7/I7 rating.  Hence, consolidation has a better impact.

Repayment of debts in a period of five years is usually what debt management and credit counseling ends up with. The common notion that debts are insurmountable is overturned by these programs. The greatest benefit, I guess, is the feeling of ease when it comes to confronting debts.

Sometimes one of the most painful and yet essentially needed things for you to do financially is to have a plan for your budget. With the proper approach you can change your financial future. Planning your finances without setting out a budget is like having a map without a compass. Belonging to a credit card generation can drive people to a tendency to spend more than what they earn. The advertisements we see both in television and online are sending subliminal messages for anybody to spend on none essentials. With the present economic problems that the nation is facing and the world in general it is always wiser to be armed with your own savings and investment account.

Create a budget that designates where your money goes. Do not spend all of your paycheck money until you have work on a good budget plan. Make a specific list on things that you need to pay until the next paycheck arrives. They can be on rents, utilities, vehicle payments, insurance, loans, gas, child’s tuition fees, and foods. If you are getting a negative amount from your income and expenses listing than you are spending more than you have. If on the other hand you are a wise planner then your excess money can be invested.

When budgeting divide your money into what goes on for spending, what can go for savings and what can be for emergency needs. Ask yourself first if you really need the item that you wish to purchase. There are many cases that you do impulse buying. What I usually do is to make my grocery list and stick to my list. In this way I can avoid buying things that I do not really need.
Learn to invest. There are plenty of opportunities to invest but do research for them first. Divide this into short and long term investments.

• Real Estate Properties: If you have a long term investment goal this may be good for you. Because of the economic recessions many real estate properties are offered at lower prices.
• Gold Investments: For investors who wish to invest on something that is safe this may be your window of opportunity. Gold can be bought in electronic form to insure its safety. You would make a huge profit when reselling them for higher prices.
• Mutual Funds: For conservative investors there is a wide range of options in mutual funds investment. You can choose from small cap, mid cap and large cap as an investment portfolio. Consult a trustworthy fund manager so that you can earn higher profits. Study the documents that he offers before making your final decision.
• Deposit Schemes: Banks and financial institutions can offer long term investments for both retail and common investors.

To budget your money is to help you save for you and your family’s future. Be disciplined financially and you will go places.

With the present economical situation in the country and the world in general it is good to keep your spending under control. It just needs to be simplified for easier implementation. One thing about budgeting is that it is just comparing your income versus your expenses. As simple as this may sound, this is the key to being financially stable.

Regardless of where you stand right now things will just get better no matter if your present condition is bad, it can be made better and if you are doing good right now, it would be good not to be sidetracked in your financial success.
For anyone whose expenses exceeded his or her income, you are not alone.  What your job is to start cutting down on unnecessary expenses and start saving for your future.

Make a list of your expenses. Financial computer programs can help you analyze your check and credit card payments but they cannot cover everything else. The simple solution would be to keep track of your expense record in a ledger or notebook that you designate for this financial planning purpose. Begin recording your expenses on the first day of the month. Make seven columns on the first page (designating a day of the week for each column). Record the date. Record each daily expense that you make; be it by check or cash. After a week on the next page make another seven columns which will be for the following week. Do the same things all over again, until you reach a month’s worth of expenses. You can do this for the next three months since some payments that you make is good for quarterly expenses.

This does not complete your financial assessment, you must also add up your monthly income. On a blank sheet of paper list all the jobs that you have, including your other income sources such as bonus pay, dividends, alimony or child support, and pension/ retirement income. Next to your source of income, list your net income (what you make after deductions are taken out).

After you keep track of your income and expenses for several months, you are now ready to make your budget. If your expenses surpass your income, you will either try to look for side jobs to support these expenses or decrease your expenses. The key is not depriving yourself with things that you really need.
It is better if you categorize your expenses: home, food, child care and education, clothing, self care, health care, entertainment, transportation, taxes, insurance, savings, investment and pet care. Always review your budget and make necessary adjustments. If you are overspending on one category it is time to trim it down.

If you got debts to pay you need to consider making larger financial changes. For example you can trade in your new car for an older one. Think about what you value the most. And lastly since there are so many things that happen in life that takes you unaware better be financially prepared rather than broke.

There are practical steps on getting out of debt.

Stop increasing your debt. If you have two credit cards just use one and cut the others in half, but don’t close out your account.  Place yourself away from financial temptation by moving out of its beckoning grasp.  Use your credit card ONLY for essentials.

Record your spending. If you are like most people your debt did not grow overnight. It came from some small purchases and a few major ones. Avoiding over spending starts when you know how much you are spending and for what you are largely spending it on. Purchase a notebook where you can record your daily expenses for a month.

Categorize your spending. Categorize them by must haves( basic essentials such as food and clothing etc. ),should have( are those expenses that you can still live without such as new clothes, gym memberships etc.) and Like to haves( These are things that you do not really need but it enhances your life( magazine subscription, spa, coffee out with friends). By doing this you will have a clear view on what you spend your money on. You can also figure out what you need to cut back on.

Make a budget based on your spending. Write down the specific amount that you spend each month as you budget for the next month. If last month you bought a pair of jeans for $60 then write it down.

Figure out a way to save for your debts by setting an amount aside each month. Looking at your new budget you will be able to see areas where you can cut back.  Write all of this down so that you will have a clear picture of how well you are doing. If for example you are going over your present budget then you can decide to hold back on your purchases.

Figure out how much you owe and to whom. Debt can be overwhelming especially when you don’t know where to start. Gather up your bills, make a list of all the debts that you have. Write all the details needed such as the name of the creditor, your total balance and the monthly payment that you are making plus the interest rates involved.

Start paying it off. Take the money that you have set aside for debt repayment and pay your debts. Prioritizing is important. Pay your past due creditors first or those that have high interest rates. At least tell them you plan on paying next month for your sanity, so they will stop calling you.  In fact, let them know you are working on budgeting your money in order to pay your debts.

Once you figure out how much you owe and how you can pay it. It gets easier and easier for you. Do not give up if you fail on some things while trying to get out of debt as long as there is life there is hope.  The worst thing you can do is avoid these calls.  Believe me they are not going to stop calling you until you deal with them.

The one thing that may hinder you from planning how to manage your financial future may have to do with fear about your future. If financial obligations are overwhelming you and you are constantly worried about your bills it is time to sit down and find ways to improve your financial standing and doing it successfully in the process.

When you keep your emotions in check you can see clearly where you are now and where you are heading financially speaking. Develop skills in the area of planning and budgeting. Some software may be able to help you on this but it still is better to do it manually. There is no real mystery about the financial world if you try to figure things out for yourself. Educating yourself financially is a wise move.

What are the practical ways to manage one’s personal finances?
Cut down on none essentials. If you do not really need three or four credit cards then try to limit this to only one. Throw out the remaining ones, and try to use this only when really necessary. Do you really need three cars? How about four sets of television? Do you really need all of these? You can even sell those that you do not need. There are many things in your life that you are wasting your money on instead of saving for future needs.

Managing your personal finances can also open worlds of opportunities for you in the business field.  A business is a way for you to expand and grow. Develop relationships with the people that you meet and discover how your skills can help them. Being in business is a two-way street.

There is a normal give and take kind of relationship. Invest in your personal skills. Learn to develop these skills. There are lots of ways to learn and the internet is a good tool to search for them. Position yourself for your future destiny by making practical planning, make sound decisions and try to evaluate if they are effective. If your plan fails, be flexible to try another approach.

Being financial responsible for your expenditures is a learned skill. In a time of financial turmoil more and more people are living in austerity. Some may be changing their life style whilst others are paying their debts. Some financial plans project your financial future by calculating how much money you need to save each month so that you can be more financially stable. These plans might be helpful but in closer inspection where do you exactly get the extra money to save for your retirement later on?

Here are some reasons why your personal budget might fail:

• Failure to prioritize which bills to pay first
• Failure to include your weekly, quarterly and annual expenses
• Failure to budget for incidental expenses
• Failure to curb spending when expenses go beyond your income

Personal budget enters the picture. When you think of budgeting you often think of ways to cut corners so that you can save for your future goal. The secret to a more attainable budget plan is to know first where you are financially speaking. If you are in a relationship, you need to have a one on one talk with your partner so that both of you can talk about what specific budget technique you need to adapt from now on. Know your monthly income after tax to get your net income.

If you feel that you cannot make your own spreadsheet for income and expenses then you can find these resources on the internet and download them. Gather all your monthly bank statements and credit card bills since you need to input this on the data for your budget plan. It is wiser to double check all your budget numbers just to be sure if they are correct. Creating a good budget plan takes careful planning and preparation. Three to four months of data is a reasonable basis for your budget plans.

Simplify things by creating several categories for your budget each month. It will be easy for you to manage your expenses if you know which category it falls under. Separate your monthly bills from your non-monthly bills. Establish a certain amount that you set aside for savings and stick to it.

Know what areas you can cut down your expenses. It is always wise to save for your retirement. You can invest your money in high yield savings account. From the left over money that you may have, allow yourself some kind of luxury by being able to spend on what you want to buy so that you are not short listing yourself in the process. It is also good to give to your church and donate something for charity.