Tuesday, November 10, 2009

Its Tuesday...you know what that means...

Let's talk finance. I don't know about you all, but it seems to me like there is never enough money to go around. I can count on one hand the number of people I know who are financially stable. For those of you who are (or who claim to be)...this is not for you. ha. For the rest of us poor souls (literally), I'm going to show you how to make an easy budget and find the tools to actually stick with it. 
1. Here's the hardest step...for the next week, track your spending...on EVERYTHING. This could get difficult and ugly if you're like me and don't actually "balance" your checkbook. That's what online banking is for right??? Well try. There's a really cool site called MINT, that can help you with this...It links to your own banking institution and tracks your spending for you.  
2. After your week of tracking you might have to start deciding what things you can/can't live without. Starbucks, Sephoria and Urban Outfitters might have to take a vacation for a while if you want to start saving money. 
3. Next you'll need to decide how you want to budget your money...be it monthy or bi-weekly. Since most of us get paid on a bi-weekly schedule, its suggested to start that way. 
4. Your budget will most likely be in 3 categories; Net Income, Non-Discretionary Expenses, and Discretionary Expenses. The ND's are things like rent/mortgage, utility bills and depts that you pay every month (or bi-weekly) the D's are things like: eating out, movies, pocket money or "Flow" and the likes. 
5. Now break out your calculator and subtract the ND's and D's from your net income...are you in the red or in the black??
If you've got money left over you're doing better than you thought and your financial planners will tell you that those monies left over should be going into 1 of 2 categories: savings or investment or debt repayment options. (Not a new pair of shoes unfortunately.) 
If you find yourself in the red, fret not. Maybe you're being too generous with your estimated expenses and you can revise those as you see fit. If after you've review the numbers and you're still in the red, its time to get real with yourself. You're living far beyond your means and you're going to have to tighten your belt if you want to save money. You may even have to go without the things you have come accustomed to living with like, cable or Netflix...but please don't go without food or anything that essential to your survival. 
Once you have come up with a budget plan, stick with it. If you are more conscious about your spending you will find it easier to save money or not spend it on frivolous things you don't need. MINT can also help you not to fall into old spending habits by giving you a graph chart of your spending as the months go on. Give it a shot...it could help. :) 
BTW...there are tons of online forums and sites dedicated to helping you build your budget. Some are free and some require payment. Try the free ones first. You can also download a budget template from excel if you're a microsoft user. 

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