The Money Secrets Website

Budgeting Success Techniques & Ideas

  Home  Money  Credit Cards  Debt  Mortgage  Savings  Calculators  Members  Articles 

Budgeting Success Techniques

Budgeting & financial planning budgeting Creating a personal budget is often the first concrete step people must take to bringing their personal financial affairs under control. A budget is all about getting your financial affairs in order, knowing what your monthly income is and what your monthly outgoings are.

To budget for the future and plan a debt busting strategy, it is necessary to examine your past expenditure, ideally up to two years worth. This way you KNOW where your money is going and if there are problems, you know where they are.

A budget is perhaps the most fundamental financial task you will need to do. ALL debt and financial success strategies start here. People often feel a great deal of anxiety when they first approach this task, but I can assure you, once started, the fear starts to disapate and often once completed there is not only a huge amount of relief, but already a clear path forward may emerge and you will feel more empowered as your financial control starts to return.

Benefits Of A Personal Budget

Here are just some of the benefits of having a personal budget.

  • Budgeting gives you a clear and accurate picture of your current financial position.
  • Your budget will hightlight spending and income issues where improvements can be made
  • A Budget helps identify poor spending habits or unnecessary expenses
  • A budget helps you meet your basic living expenditures and can guide you out of debt.
  • Your budget will enable you to take back control of your finances
  • Having a budget will reduce your stress

Creating A Budget

Step 1: Get Your Attitude Straight

You are about to start a vital task that is the key to getting out of debt and achieving the wealth you need to fulfil your dreams. Do NOT throw it away by indulging in self-deception, honesty is essential to reveal the truth of your position.

If you are unable to be brutally honest with yourself about your finances, then seek help from a trusted friend or "buddy up" with someone who also wants to do a budget.

The secret is to not think about it to much but just get started and keep going!

Step 2: Prepare Your Documentation

You will need to gather all your financail documents. Bank statements, credit cards statements, details of all your debts, bills, check books etc - for the last two years. If they are not carefully filed in an easy to access way, start by filing everything and getting them in order. Locate or re-order missing documnetation.

Step 3: Work Out Past Spending

Put all your income and expenditure into categories and add up the incomes and expenditures for each month of the whole two year period. This is what is known as a "Cash Flow" and shows your income and expenditure over time. Finally create an income and expenditure sheet. You can use our online Income & Expenditure Calculator if you wish or do it on paper. Simply average out your expenditures to give you an average expenditure per month. For your income, take a figure that represents your average income now.

Step 4: Review Income & Spending

Review spending to see if savings can be made (see- Money Saving Tips ). It is also worth looking at ways of Increasing your Income ( see - Increasing Your Income ). Look at new ways of doing things and question the necessity of ALL of your expenditures.

Step 5: Completing Your Budget

Revise Your budget based on the latest figures that have come out of step 4. Repeat the proccess until you have a budget that is workable. It is important that your budget be realistic and achievable otherwise you are simply setting yourself up for failure. If you are having difficulty balancing the budget, think about other ways that you can reduce your costs or increase your income. Do you have assets to sell, would a refinance help. Explore all possibilities.

Staying On Budget

Hopefully by the end of the above process you will have a budget that you can use to manage your future expenditures. Each category has a spending limit which you cannot exceed. What this means is that if you stick to your budget, you will be able to know your financial situation from day to day and there should be fewer nasty surprises.

If you find difficulty working with your budget consider Enrolling with Mvelopes Personal who provide a structured online budgeting sytem that is very effective.

Budget Home
Increase Your Income
Money Saving Tips
Reduce Spending Painlessly
Income Expenditure Calculator