How to Stay within Your Budget

how to stay within your budget

Has the economic downturn got you worried about money? If you haven't done so
already, now is the time to make a budget and stick to it - you'll need to keep
your expenses in line with your income.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• keep track of everything
• calculator
• savings

1. First, find out how much money you take home after your insurance premiums and taxes are deducted. This is your budget limit. Now figure your expenses: rent or mortgage, insurance, utilities, transportation, debt payments, food, clothing and entertainment. Don't forget savings! Aim to split 15% of your income between savings for retirement, emergencies, and short-term goals such as a vacation.

2. Next, take a look at how much you must allocate for fixed expenses (rent, debt payments, and savings) and how much you have left over for variable expenses (transportation, food, clothing, entertainment). Figure out what you can reasonably spend on each without exceeding your income or compromising your savings. This is your budget - make it detailed enough to be meaningful without itemizing every last dollar.

3. Now, how will you stick to your budget? Simplify wherever possible. Have your paycheck direct deposited to your checking account, and arrange for your fixed expenses - savings, mortgage, insurance, debt payments - to be deducted automatically. Variable expenses can be trickier to manage. Write your budget on a note card, keep it handy, and refer to it whenever you open your wallet.

Tips & Warnings

• Finally, keep track of where your money goes - a current running total of what you spend will help you stay aware of your budget. You might also try using cash as often as you can; many people find it harder to part with bills than to hand over plastic. Even if you blow your budget a few times, keep working on it - good budgeting is the key to financial freedom.

[MyJB]

on 8/24/2009 Good idea to keep your budge in your wallet as a reminder of financial obligations. Thanks. 5