| Key Reasons for Managing Your Budget | | | | 15. Not buy something that costs over $50 without |
| - You Have Limited Income: Virtually everyone has | | | | consulting each other and the budget |
| limited or fixed income. Without budgeting you are | | | | Cash Flow Management Checklist |
| being controlled by your environment. If you have a | | | | In addition to having good budgetary habits, it also helps |
| plan, you are more in control of your money. Without a | | | | to take advantage of money-saving measures. The |
| budget, you may not really know you are spending | | | | following are many of the things you can do to help |
| more money than you are earning. | | | | you save thousands of dollars per year. |
| - So That You Know Your Limits: Knowing what your | | | | - Employ tax advisors to you avoid overpaying taxes |
| monthly expenses are projected to be and what they | | | | - Use low cost investments that have low to no |
| actually are will help you keep track of how much | | | | commissions, fees and expenses |
| money you have left over for future goals and needs. | | | | - Shop your loans to find lowest interest rates |
| - You Have Unlimited Demands: There is an endless | | | | - Shop your insurance for the lowest prices possible. |
| demand on your finances. Our commercial capitalistic | | | | - Buy smaller homes and cars since they require less |
| society is constantly calling out for you to buy. If you | | | | money to maintain and insure |
| have minor children, the demands are greatly | | | | - Go on cheaper vacations |
| increased by the things that they want, the activities | | | | - Frugal travel to lower the already large consumption |
| they are in, and the schools they attend. | | | | of your income for gasoline |
| - You Want Freedom Not Bondage: Budgeting seems | | | | - Eat out cheap, less often and at less expensive |
| to be restrictive to some people. The reality is that we | | | | establishments and cafes |
| have to make choices between what we want at the | | | | - Spend less on food by shopping at low price grocery |
| moment and our regular bills and goals for the future. | | | | stores and pack your lunch |
| However, there is freedom in knowing what your limits | | | | - Lower home energy consumption by employing easy |
| are. Many people find this liberating, because it creates | | | | to find and low cost solutions |
| the opportunities to grow and mature. | | | | - Break smoking and excessive eating habits to save |
| - You Have Future Goals: If you are sacrificing today, it | | | | on tobacco and fast foods |
| helps to know what you are saving for in the future. | | | | - Monitor emotions to avoid depression or stress |
| Obtain a financial plan so that you will know what your | | | | related purchases |
| goals are and for what you are saving. | | | | - Obtain from the library resources about budgeting, |
| - You Want to be More Aware of Where Money is | | | | financial planning and spending |
| Going: If you do not have a budget, you may have no | | | | - Go to the library for entertainment books and DVDs |
| idea where your money is going. Knowing where you | | | | - Reduce or eliminate cable TV |
| money is going will help you identify if you are spending | | | | Budgeting Tips |
| too much money in specific areas. | | | | Use technology or spreadsheets: |
| - You Want Less Stress: Spending without a plan and | | | | Obtain software (or use spreadsheets) that will help |
| a budget increases your stress because you do not | | | | you pay bills and make and monitor a budget. Devote |
| have a well thought out plan for paying your bills and | | | | time to it by keeping track of all expenses and enter |
| you may spend more money for fun than you can | | | | them into your software program or monthly |
| afford. Planning and budgeting will give you the peace | | | | spreadsheets each week. |
| of mind that you are on the right track. | | | | Save all receipts, bills, household documents, and tax |
| Contract with Yourself (and between Spouse) | | | | documents: |
| Budgeting is very hard for many people; therefore, it | | | | Organize these items by category into an accordion |
| helps to have a contract with yourself. If you are | | | | file or drawer: e.g., auto, bank, business, credit cards, |
| married, this agreement should include your spouse. If | | | | dental, medical, grocery, income, insurance, mortgage, |
| you work together, you will usually accomplish more | | | | utilities, general receipts, school information, and taxes. |
| than you could on your own. | | | | Balance your checkbook: |
| I hereby resolve to: | | | | Many people don't balance their checkbooks each |
| 1. Start a budget, and pay attention to it weekly and | | | | month. Budgeting software makes reconciling simple, |
| monthly | | | | but you can read the back of your statement or make |
| 2. Not spend more money than I make | | | | an appointment with your banker if you need to learn |
| 3. Be in financial partnership with my spouse with no | | | | this skill manually. |
| secrets between us | | | | Tax Time: |
| 4. Not borrow to purchase items that depreciate in | | | | If you use budgeting software, you can run a tax |
| value | | | | summary report before you work on your taxes. If not, |
| 5. Not let my emotions make me purchase anything, | | | | and if you itemize your taxes (Sched.A), you must total |
| including gifts | | | | the appropriate columns in your spreadsheets, e.g., |
| 6. Not purchase something over budget unless it was | | | | Medical expenses (Your accountant may provide you |
| unavoidable | | | | with an organizer to help you get ready for tax time.) |
| 7. Not purchase anything that I don't really need, no | | | | Remember to place quarterly and yearly expenses on |
| matter how good the sale is | | | | the appropriate month in your budget so that you do |
| 8. Not purchase something to keep up with the | | | | not overspend. For example, annual insurance |
| Joneses | | | | payments, quarterly tax estimated payments, annual |
| 9. Not apply for any new credit cards, unless lowering | | | | homeowners association dues, etc. |
| interest rates | | | | Summary |
| 10. Pay off all credit cards monthly (I will work toward | | | | Good cash flow management is key to implementing |
| paying them off) | | | | any financial plan; commit to doing this well. No one |
| 11. Not spend money on fun things unless I have paid | | | | likes self-discipline, but it is actually good for us. With |
| my monthly bills | | | | proper management of your finances, you will become |
| 12. My spouse and I will both be the "fun police" | | | | more confident and less stressed about your future. |
| 13. Include children in the budgeting exercise to teach | | | | Remember, one bad financial decision can sometimes |
| restraint | | | | take years to undo. Be very careful with all decisions |
| 14. Not obtain high maintenance items like a pet or | | | | you make. |
| hobby if I can't afford the expenses. | | | | |