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Budget Basics - Budgeting your Way to Financial Freedom

Anyone who desires a brighter financialyour monthly income. Refer to the
future must make sure to live in the"Help" button on your spreadsheet
financial present. This requires theprogram if you are unfamiliar with how
creation of, and adherence to, a budget.to do this - don't worry, it is very
This simple yet critical step toeasy. The last line will be the overage
financial freedom is often ignored.or shortage of money for that month.
Many people feel it is overlyOptimizing Your Budget
complicated; or they believe themselvesIf you end up with a negative number at
thrifty enough that creating a workingthe bottom of your budget spreadsheet,
budget is unnecessary. The fact is thatyou are spending more than you are
very few of us do not need improvementmaking. Seeing that, you may be tempted
with financial planning; most of usto run to the phone to call a financial
would be surprised - even shocked - toplanner; but that costs money, which you
see exactly where our money goes.do not have. You can very likely fix
Budgetary Preparationyour financial problems yourself. Save
If you want to create your own budgetthe money.
from scratch, begin by tracking everyReview each spending category and
dollar you spend for at least a month.determine where you can make cuts.
Credit card and bank card purchases canCreate a new column on your spreadsheet.
be monitored easily by looking over yourEnter in your goals for next month's
monthly statement, which is usuallyspending - be aggressive, you are
available online instantly. Make surestriving for financial freedom. Keep
to track all of your cash purchases, asadjusting until the bottom number is
well. It is important to know wherepositive.
every dollar goes. Spend a little timeThe next step is one that cannot be
categorizing the purchases. You shouldskipped or taken lightly. At the end of
have at least one category for savingsthat first budgeted month, compare your
or investments. Pay yourself first!actual spending to the numbers you set
You can also find preformatted budgetas your goals. Do this with every
templates on financial planningsingle category for the first two or
software, like Microsoft Money orthree months. By then, you will know
Quicken, or on the web. If you go thiswhich areas need work, and you can focus
route, find a budget template with amore on them.
large number of categories. You canBudget Success
then pare it down to suit your lifestyleIf you can get to the point where there
and spending habits. The benefit ofis always a positive number at the
this is that you may see some categoriesbottom line, you will experience the
that you had not thought of. If somesensation of "budget elation." Resist
categories do not apply to you, simplythe temptation to spend the extra money
eliminate them.on a party to celebrate your frugality.
Building Your BudgetDo not buy a self-congratulatory flat
Open up your favorite spreadsheetscreen TV. Feel free to pat yourself on
program. The top row of your budgetthe back, though. The extra money
will be your monthly income. If yourshould be saved or invested. Save for a
income varies from month to month, use adream vacation or for your kids'
low estimate, so that you have aeducation, without worrying where your
cushion.next meal will come from. Invest for
Under your income, put in each of theyour retirement or start your own
categories you created. Eachbusiness. Financial freedom will come
expenditure should be subtracted fromif you make your money work for you.



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