| Anyone who desires a brighter financial | | | | should be subtracted from your monthly |
| future must make sure to live in the | | | | income. Refer to the "Help" button on your |
| financial present. This requires the | | | | spreadsheet 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 financial | | | | easy. The last line will be the overage or |
| freedom is often ignored. Many people feel | | | | shortage of money for that month. |
| it is overly complicated; or they believe | | | | |
| themselves thrifty enough that creating a | | | | Optimizing Your Budget |
| working budget is unnecessary. The fact is | | | | |
| that very few of us do not need improvement | | | | If you end up with a negative number at the |
| with financial planning; most of us would be | | | | bottom of your budget spreadsheet, you are |
| surprised - even shocked - to see exactly | | | | spending 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 Preparation | | | | money, which you do not have. You can very |
| | | | likely fix your financial problems yourself. |
| If you want to create your own budget from | | | | Save the money. |
| scratch, begin by tracking every dollar you | | | | |
| spend for at least a month. Credit card and | | | | Review each spending category and determine |
| bank card purchases can be monitored easily | | | | where you can make cuts. Create a new column |
| by looking over your monthly statement, which | | | | on your spreadsheet. Enter in your goals for |
| is usually available online instantly. Make | | | | next month's spending - be aggressive, you |
| sure to track all of your cash purchases, as | | | | are striving for financial freedom. Keep |
| well. It is important to know where every | | | | adjusting until the bottom number is |
| dollar goes. Spend a little time | | | | positive. |
| categorizing the purchases. You should have | | | | |
| at least one category for savings or | | | | The 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 budget | | | | to 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 the | | | | two or three months. By then, you will know |
| web. If you go this route, find a budget | | | | which 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 benefit | | | | Budget Success |
| of this is that you may see some categories | | | | |
| that you had not thought of. If some | | | | If you can get to the point where there is |
| categories do not apply to you, simply | | | | always 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 Budget | | | | extra 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 your | | | | the back, though. The extra money should be |
| monthly income. If your income varies from | | | | saved or invested. Save for a dream vacation |
| month to month, use a low estimate, so that | | | | or 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 the | | | | business. Financial freedom will come if you |
| categories you created. Each expenditure | | | | make your money work for you. |