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Budget 101: Create a personal budgetWhy is it important to create a budget?
The basics of Budget 101 says if you do not know where your money is going each month, then you could be sliding
deeper and deeper into debt. It's important to take stock of where you are, in order
to create a road map to get where you want to go
Budget worksheets
To get a good idea of your discretionary spending, you really need to track your receipts and write down everything you spend for a month - this includes coffee in the morning, lunches, dry cleaning, clothes, vacation, movies, dinner out - anything that's not "fixed" like rent/mortgage, car payments, taxes, utilities, insurance and child-care costs. Click here for tips on how to trim the fat from your budget
An old savings adage is "always pay yourself first" Its hard to think about doing this sometimes when you are struggling to pay your monthly bills. But its true, it is easier to save if you take out savings by direct debit at the beginning of the month, and then work on your other commitments from there. Aim to save at least 10% of your income for retirement and 10% as an emergency fund for unforeseen expenses (car trouble, broken washing machine)
Pay down your "bad" debt first. Click here for tips on how to get out of debt fast
Try to keep housing costs to 25% to 35% of your total monthly budget. Anymore than this, and its going to be difficult to keep your head above water. If your personal budget shows that you are falling deepr and deeper into debt, then take a look at your options for Debt Consolidation and Debt Negotiation
Don't forget to reward yourself occaisionally. Although its good to be focused on paying down debt and increasing savings, all work and no play makes Jack and Jill a very dull person, and anyway, as anyone knows who has a lousy boss, its hard to stay motivated without a reward.
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