Make A Plan- A Budget Is A Money Plan

The" B" word sends a shudder down the spine of many people.

That it is somehow locked up in this budget and cannot be used for anything else. It conjures up fears of never being able to do anything with their money. That in fact is not the case. And more importantly to give you a plan that tells your money what it is supposed to be doing, whether that's paying bills, going into savings or retirement accounts, or to buy groceries. A household budget is simply a way to see where all your money is going. Every successful business or person has a money plan.

With a budget you can set and achieve your financial goals. This is what a budget is, a plan for your money, telling it what to do instead of it telling you what to do. You can also get a better view of what your money can do for you now and in the future. It will also give you a good record of your monthly expenses based on each month's expenditures. With a household budget you can create a spending and savings plan that puts aside a certain amount of money each month for known and unexpected expenses. The first thing you need to do when setting up a budget is figure out what your monthly income is.

If you work on commissions or are self employed this may be more of an estimate. If you have a salaried job this is easy because it is a set amount each pay period. Write this number down at the top of your budget sheet. Start writing down all your monthly expenses and include even the smallest of expenses. Now comes the fun part. There are certain fixed expenses such as mortgage, insurance that you, car payments need to make every month.

If you start by subtracting your fixed expenses from your income what you are left with needs to be budgeted to pay for those expenses that seem to change from month to month. You will also need to track those expenses that are more fluid, gasoline, such as groceries, clothing, and entertainment. Once you are done allocating money to all your expenses what you are left with is either a positive or negative cash flow. This is very helpful if you are living pay check to pay check because chances are you can find some areas that you can easily cut back on or do without to leave you with extra cash at the end of every month. The nice thing about a budget is you can quickly scan what you have written down and see exactly where the money is going. Here are four quick tips to help get your budget on track. Most people work for their money instead of having their money work for them.

Learn money management- Successfully dealing with money is 80% behavior. Make a plan- A budget is a money plan. In fact most every activity in life involves some sort of plan. Most people would never dream of building a house without a plan. But our most important asset, is left plan, our money free and when we run out or are weighed down with debt we don' t know why. Needs are basic things like a home with a roof, clothes, groceries( in moderation) , transportation to get to work.

Needs and Want- Know the difference. You don' t need a$ 400 plus car payment to get to work or a pair of$ 100 designer jeans. Be a little frugal- This doesn' t mean live in a cave. You may want them but you don' t need them. You can still have fun but make sure it fits into you budget. You will have to be patient with the process because chances are it will not work the first 2 to 3 months you do it. Creating a household budget is the first step to getting your finances under control.

But remain diligent and around the third month you will begin to see patterns that will help you refine your budget into a financial plan that will set you on the right path.