by Angela Diggs

Created on: September 26, 2008   Last Updated: March 27, 2009

Building a sensible budget is not difficult. The first step is finding out how much money you have. Then you find out how much your total expenses are. If you are spending more than you make, you must decrease your spending. Maturity, discipline and patience play a large role. It is as simple as denying yourself a pair of shoes.

If you are still blaming money for your problems, you will not create a reasonable budget. Instead you will make a budget that is convenient to your wants instead of your needs. This will not help you; it will only hinder you from achieving your goals. Below are the steps you need to make a rational budget. Budgeting does not mean restriction; it gives you more power over your money. You spend what you have.

1) ATTAIN HELP.

Ask for help! This is difficult sometimes, because many of us do not want other people to know we are having financial problems. We get caught up in our pride and don't seek assistance. This is not smart, it's unwise. Speak to someone who knows about money. It is wise to get in touch with a money coach or financial advisor. Get an outside opinion. These people are experts and can help you navigate your way to freedom. They can see things you do not see. Face your problem head on by getting all the necessary papers you need. Before they arrive, get every piece of information on your income and expenses. This way you and the money coach will know exactly what to expect.

2) PAY YOURSELF

I can not stress this enough. It is important to pay yourself first. Take 10% of the money you earn every week and put aside just for you. This will take some stress off of you. It provides you with a money cushion.

3) ASSESS HOW MUCH MONEY YOU EARN EVERY MONTH

It is easier to budget when you know how much you are dealing with every month. If you earn $2000.00 a month, assess how much you should spend on basic expenses. Get all your papers together and find out for sure how much net income you bring home.

4) ASSESS HOW MUCH YOUR EXPENSES ARE.

Now that you know how much you earn, find out how much your expenses are. Find out how much it costs for electricity, water, and mortgage or rent.

5) PRIORITIZE

While you are at the table make a list of what the largest expense is. If it is your mortgage, write that down. The most important things are food, water and shelter. Find out how much you need to feed you and your family.

6) TRANSFER DATA INTO THE COMPUTER TO MAKE A PIE CHART

Once you have collected all the essential information, have your financial

• 1
• 2
• Next Page >>