Budgeting

Let me ask you a few questions.

Do you usually run out of money by the end of the month? Are you living paycheck to paycheck even though you make decent money? Do you have a budget or are you flying by the seat of your pants?

If you answered yes to one or more of the questions above, chances are good that you don't have a personal household budget. It's a sad fact that most people don't have a monthly budget because they thing that budgeting money is too stressful.

What are your feelings when I tell you that you need to create a personal budget because budgeting money is the only way to gain financial freedom?

- Stress
- Anxiety
- Fear
- Anger
- Deprived

Most people feel all of the above at the just the thought of creating a budget plan. The whole process of budgeting money is a complete mystery to a lot of people. Feelings of stress, anxiety, fear, anger and deprivation all set in when you think about sitting down and planning a personal home budget.

But budgeting money doesn't have to be any of these things. Your money is out of control without a budget and you have no idea where most of it is being spent. With a personal budget plan, you will actually have more money to do the things you want to do because you sit down ahead of time and PLAN where you want to spend it.

Planning a personal budget doesn't have to be difficult, especially if you break it down into smaller steps. The process as a whole can be very overwhelming and many people wonder how they can ever stick to a budget. So let's talk about some budgeting tips to make the process easier.

1. You need to know what you have been spending in order to get a plan to control where you spend your money in the future. Most people don't keep all of their receipts so it can be difficult to go back and try to track where you money has been.

2. For the next month, you need to keep every receipt so that you can track every penny you spend. Have a special folder or large envelop that you stick every receipt in as soon as you walk in the door.

3 After you have kept your receipts for a month, you can sit down and categorize your money. Certain things like your mortgage or car payments will be the same every month so those things will be easy. Track expenses in categories like:

- Mortgage/Rent
- Utilities
- Gas
- Insurance
- Groceries
- Entertainment

There are many other categories of course but these are some of the basic things that you will need to track. Figuring out exactly where you are spending your money every month is the key to setting up a budget.

4. The next step is to take your monthly income and subtract all of your monthly expenses. The number you get is either the amount you have left over every month or how much you are overspending every month. If you have extra money every month, then you can come up with a plan on how to save more money. But, spending more than you make every month is a huge problem and steps must be taken to reduce your spending and bring in more money.

5. The next step is to set up a budget and stick to it which is easier said than done. It helps if you set up short term goals and long term goals that you can look at every day. Knowing you have goals that you are saving for makes it easier to not spend your money on a whim.

6. Stop impulsive spending. This can be very hard to do especially since your spending habits are so ingrained.

Budgeting money makes most people shudder with dread because they think it will limit some of the pleasures in their lives. But the opposite is actually true. By controlling your money, you can spend your money on those things that bring you the most money instead of just frittering your money away every month.