by Carrie Weitz

Created on: September 27, 2008

Many people immediately try to tune out when they hear the word budget. It evokes images of sacrifice, confinement, and a feeling of living to work, rather than working to live. A budget does not have to feel like a prison. In fact, a proper, sensible budget is a tool for freeing yourself from the weight of your bills, allowing you to enjoy the fruits of your labor without jeopardizing your long term success.

The first step in devising a reasonable budget is to evaluate both your needs and your wants, and honestly labeling them as such. While you're cable internet connection may qualify as a need if it is an integral part of your job, you cannot sneak your HBO/Showtime package into the needs column. Check your bill for these line items and categorize them fairly. Depending on the services available to your area, you can probably even assign a lower internet connection speed to your needs list, and the faster service to your wants.

This step isn't always possible to complete in one session. If you already know that you spend approximately $100 in drips and drabs over the course of an average week, you are ahead of the game, but you still need to list those individual drips and drabs. It may seem redundant if you have no desire to change that number, but do it anyway. Rare is the person who has not been shocked to discover that they spend more in ATM fees on the way to the coffee shop than they do on the coffee, or the person whose stomach churns when they see how much they pay for the daily newspaper that almost always goes straight to the recycling bin after scanning the front page.

There is no hard rule that says you must give up frivolous spending. If touching the front page of that newspaper every day makes you happy, and you can afford it, keep it on your list. Your wants list, that is. The key is in deciding which wants enrich your life, and which wants actually drain your resources, giving you little in return. As you compile your lists, rank each item. You may find that you've been placing some of those lower needs in the wrong category all this time.

A sensible budget should address your present expenses while planning for the future. If the past is still hanging over your head, you have an extra step to work on. Past due bills or large consumer debt must take top priority. Your wants list is irrelevant until you dig yourself out. If you owe the electric company, or you're still paying for your 5-year-old television, you cannot afford to entertain your

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