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Budget Basics - Budgeting your Way to Financial Freedom

Anyone who desires a brighter financialshould be subtracted from your monthly
future must make sure to live in theincome. Refer to the "Help" button on your
financial present. This requires thespreadsheet program if you are unfamiliar
creation of, and adherence to, a budget.with how to do this - don't worry, it is very
This simple yet critical step to financialeasy. The last line will be the overage or
freedom is often ignored. Many people feelshortage  of  money  for  that  month.
it is overly complicated; or they believe
themselves thrifty enough that creating aOptimizing  Your  Budget
working budget is unnecessary. The fact is
that very few of us do not need improvementIf you end up with a negative number at the
with financial planning; most of us would bebottom of your budget spreadsheet, you are
surprised - even shocked - to see exactlyspending more than you are making. Seeing
where  our  money  goes.that, you may be tempted to run to the phone
to call a financial planner; but that costs
Budgetary  Preparationmoney, which you do not have. You can very
likely fix your financial problems yourself.
If you want to create your own budget fromSave  the  money.
scratch, begin by tracking every dollar you
spend for at least a month. Credit card andReview each spending category and determine
bank card purchases can be monitored easilywhere you can make cuts. Create a new column
by looking over your monthly statement, whichon your spreadsheet. Enter in your goals for
is usually available online instantly. Makenext month's spending - be aggressive, you
sure to track all of your cash purchases, asare striving for financial freedom. Keep
well. It is important to know where everyadjusting until the bottom number is
dollar goes. Spend a little timepositive.
categorizing the purchases. You should have
at least one category for savings orThe next step is one that cannot be skipped
investments.  Pay  yourself  first!or taken lightly. At the end of that first
budgeted month, compare your actual spending
You can also find preformatted budgetto the numbers you set as your goals. Do
templates on financial planning software,this with every single category for the first
like Microsoft Money or Quicken, or on thetwo or three months. By then, you will know
web. If you go this route, find a budgetwhich areas need work, and you can focus more
template with a large number of categories.on  them.
You can then pare it down to suit your
lifestyle and spending habits. The benefitBudget  Success
of this is that you may see some categories
that you had not thought of. If someIf you can get to the point where there is
categories do not apply to you, simplyalways a positive number at the bottom line,
eliminate  them.you will experience the sensation of "budget
elation." Resist the temptation to spend the
Building  Your  Budgetextra money on a party to celebrate your
frugality. Do not buy a self-congratulatory
Open up your favorite spreadsheet program.flat screen TV. Feel free to pat yourself on
The top row of your budget will be yourthe back, though. The extra money should be
monthly income. If your income varies fromsaved or invested. Save for a dream vacation
month to month, use a low estimate, so thator for your kids' education, without worrying
you  have  a  cushion.where your next meal will come from. Invest
for your retirement or start your own
Under your income, put in each of thebusiness. Financial freedom will come if you
categories you created. Each expendituremake your money work for you.



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