Prepare a Realistic Budget to Start the Year Off Right

Monday we talked about various financial resolutions you might make, and the importance of getting your finances in order for the new year. The best place to start, in my opinion, is with a budget.
For some reason I can’t fully understand, budgets scare people. I don’t know how many times I have heard people say “I can’t budget.” Nonsense. Budgeting doesn’t have to be complicated. $100 Payday Loan Online Some people enjoy budgeting in minute detail, down to the last penny. For most this is not realistic. A budget is simply a plan. A guideline. A map to reach your financial goals.
If you want your budget to work – if you really want to stick with it – don’t treat it as a financial starvation diet. It is too easy to become frustrated and simply begin to ignore your plan as impossible or unachievable. Make reasonable estimates for food, clothing, shelter, utilities and insurance and set aside a reasonable amount for entertainment and the occasional night out or treat. To ensure you are spending in the right places, first budget for fixed expenses, then for savings, and then your other, discretionary spending.
You can find many budget forms on the internet. Plug the terms “free budget template” into any search engine. You will get plenty of hits. Pick one and work on it with your spouse or partner. One of my favourites is from Gail Vaz Oxlade (of TVs Till Debt Do Us Part). You can use the interactive online worksheet, or the Excel version.
Of course, the key to budgeting is that at the bottom of the page, income should exceed or be equal to your expenses. If not, you are spending more than you earn and could end up in trouble with debt. If this is the case, go back over your worksheet and find places to cut costs. Perhaps you can only afford to eat out every two weeks rather than every week. Or you have to cut down your grocery bill.
If you have a spouse or partner it is very important that you create your budget together. Sit down and figure out what your joint and individual financial goals are – long and short term. How much do you need to save to reach these goals? Have you made any progress towards them so far? Credit Advance Where are you willing to cut costs if needed? (This can be the trickiest part in my household. I thought we spent way too much money on groceries, and transportation. My husband felt we should cut back on entertainment and personal expenses. We did a little of both in the end.)
The key to success is to be diligent, yet flexible. Every journey begins with one step and the first step to attaining your financial goals is to make a realistic budget that both of you can live with.

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