Take Control of Your Financial Life! Create a Budget.

The single best way to take control of your financial life is to create a budget.

1. Creating a budget helps you to see exactly where your sources of income are coming from and where your money is being spent.


2. With a budget you will be able to see where expenses can be reduced to help you save money.


3. With a good budget you will be able to plan and make decisions about future expenditures and achieve financial goals.

To create a budget, gather data on your income and expenses. Three months of data is a good place to start. You can get the data from your checkbook register or online bank statements.

1. Start with a list of monthly income using the data collected for three months. You can then project your income for the rest of the year. Your income should be about the same for the upcoming months--adjust it if there are any changes.
2. list income from salary and wages, interest, dividends, self-empoyment income, and any other fixed income such as alimony.
3. Calculate a monthly total for all income.

After you have computed your total monthly income you can calculate your monthly expenses:

1. List your fixed expenses that must be paid every month first like house payment or rent, taxes, insurance, car payment, credit card and debt payments.


2. List your variable expenses like groceries, utilities, clothing, entertainment, any upcoming vacations, and savings.


3. Project your expenses by adding up the first three months of say--groceries and divide by the number of months (3) to get an average.


4. Use this average as your projected grocery amount for the upcoming months.


5. Do this with all of your variable expenses.


6. Include any upcoming major expenses that you know of like vacations and insurance payments.


7. Calculate a monthly total for all of your expenses.Subtract your total monthly expenses from your total monthly income to get your net income.


8. Try to keep your budget simple.


9. Round off dollar amounts to a whole number.


10. Look at your variable expenses to see if there are some expenses that you can cut back on and put into savings.

I have created an example budget for you to look at--just click on the link below.

http://spreadsheets.google.com/ccc?key=pw8uKsSvPJgdeEv3ebaTlLA&hl=en&pli=1