| Where does the idea of sitting down a coming up | | | | Thanks to your software program, you've just |
| with a personal budget rank on your list of "things I | | | | discovered how much per month you drop on those |
| can't wait to do"? If you're like most people, it's | | | | gourmet coffee drinks you love so much, great. But |
| probably somewhere between jabbing a fork in your | | | | now what? Now you need to set some goals for |
| ear and getting a root canal. Can't say we blame you, | | | | yourself. |
| devising a budget for yourself is definitely not the | | | | Don't be shocked if your report says you're spending |
| most stimulating activity in the world. But for financial | | | | more than you earn. It seems unfathomable, but |
| well-being, it's an absolute must. It needn't be too | | | | Labor Department statistics show that many families |
| painful though. With today's technology, | | | | who make less than $50,000 are spending a bit more |
| budget-making is pretty much a snap. Just | | | | than that annually. If you're one of them, it's time to |
| remember, the goal of creating a personal budget is | | | | slash your spending. Even if you're not in that boat, |
| threefold: 1) to list your expenses, 2) to set future | | | | there are still probably a few expenditures you can |
| goals, and 3) to cut costs to meet your goals. | | | | do without. |
| Where does your money go? | | | | As a general rule, you should reduce your spending to |
| The first part is always the hardest when it comes | | | | 90 percent of what you bring in. The rest of that |
| to starting a budget. You need to find out where | | | | money should go into savings and/or investments. |
| your money is going on a monthly basis. You could | | | | Slash and Burn |
| dig into bank statements, credit card receipts and | | | | Upon further review of your budget, some |
| check ledgers, then hand write every expense you | | | | cost-cutting measures will become painfully obvious. |
| come across on a sheet of paper. That's one way to | | | | Eating out and other entertainment costs will |
| go. The other, simpler way is to use the amazingly | | | | probably stick out the most. Expensive clothing might |
| intuitive personal finance software that's available | | | | be another. Search for those small, trivial costs that |
| today. | | | | you can do without and eliminate them. You won't |
| Programs like Quicken and Microsoft Money were | | | | miss them. |
| built to help you track your budget. Simply input your | | | | While the little things can kill, there are also bigger |
| expenditures, divide them into categories (e.g., auto, | | | | costs you can probably reduce. Take a deep, long |
| food, clothing) and subcategories (e.g., fuel, dining out, | | | | look at your lifestyle. Is your car a little too luxurious |
| shoes) and boom-the program will spit out a detailed | | | | for your pay scale? Are you dining at five-star |
| report of your monthly income and expenditures. | | | | restaurants a little too often? Are weekend |
| An even easier way to track your budget is through | | | | getaways becoming routine? If so, cut back. It may |
| online banking. Most banks offer a service where you | | | | not be pleasant, but it's necessary. |
| can download past account activity and plug it | | | | Finally, take a look at things like your bills and taxes. |
| directly into a finance program. It some cases, it'll | | | | If the mortgage you're currently paying is two or |
| even categorize your spending for you. How easy is | | | | more percent higher than what's available, look into |
| that? | | | | refinancing. When it comes to filing your tax return, |
| What are your goals? | | | | make sure you're maximizing reductions. |