subject: Sure, You Can Live On A Budget, But I'm Not Rich... [print this page] Even though most people, whether wealthy or poor, have not taken time to be trained on how to budget, getting your money organized can change how you see the world. I will admit that at times a budget can feel too restraining and even like you cant spend your own money.
Of course this is not the true because a good budget actually lets you have more freedom and control over how you spend your money. It lets you have a plan so that you control where you are spending instead of just spending during the moment and trying to figure out later where your money went.
So how do you start?
Well, start by writing down where your money is going. This can be disturbing. Once you see where and how much, you may be shocked. But you really have to track every single dollar to make this work. If you discount the few dollars here and there, you will not know the real picture.
And at the end of the week you will have a clear picture of where your money is disappearing to, sometimes without you even knowing.
But weekly spending is just the start of your budgeting plan Next you need to pull together your monthly bills and other important spending. Obviously this is stuff like, your house payment or rent, car or personal loans, electric bill, cable, internet, phone bills and on and on.
After you get a handle on all of your expenses, you need to know what your total income is. So how much do you make?
Now a little math. It's just additiona and subtraction, so don't be afraid. Add together all of your expenses and subtract them from your income. If you end up with a positive number, that is good. If it is negative, it is time to make some changes to your spending habits.
Because that negative number can be the beginning of some serious financial problems that only a professional can get you out of.
The good news is that once you get that number above zero, a good budget will even allow you to save some money over time.
And once you are at that point you can really free up your mind, your finances and your everyday life all by just some basic budgeting.
by: Oscar James
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