2 of 39

Write now Article Tools

People often look at money the way they view religion. Only the clergy or the financial advisers should read the book or do the work. However, money is something we all have to learn how to use. "As long as I'm a good person," isn't a good enough spending philosophy to keep us out of financial hell.

The first step is creating a budget. This article is not intended to tell you how much you should spend where. That is your job. If you really need that financial adviser, don't be afraid to get some help.

Before you can stick to a budget, you have to have a budget. Know your expenses. Include monthly bills and discretionary or variable expenses. Once you have done this, allocate your income to cover these debits. Don't forget savings and paying off credit cards. Visit http://financialplan.about.com /library/n_budget.htm for a simple budget worksheet to get you started.

This is just the beginning. If you've been tracking your expenditures you've no doubt found that you are spending more than necessary. How do you live with the changes you need to make?

Put your new budget in writing. You may choose to use a software program like QuickBooks or a simple spreadsheet. Perhaps you have envelopes or folders labeled with your expenses such as; car, insurance, and rent. I use a simple Excel spreadsheet. My paycheck is on the left, in the first column. Then across the top are all my expenses. I have running totals for the next year in the far right column. (You can set up formulas and let Excel do the math for you.) I can see how if I buy this watch today, in three months I'll go negative when it's time to pay car insurance.

Set long and short term goals. Challenge yourself, but take small steps first. If I can stay within my clothes allowance for the next three months, I'm scheduling a mini shopping spree. If I put $100 of each paycheck into my savings account we are going on that vacation! Once I payoff my student loans that money is going towards my mortgage, all of it. I will have my car, credit cards, or house paid off by ____ (date). Write it down, right now.

Take inventory. Clean house, especially closets and storage areas. What do I have? What do I need? Work with what you have. Do you have 12 navy sweaters and not a single good pair of shoes? Find out. Don't buy a new living room set because your ottoman doesn't match. Often a few good accessories can pull together a wardrobe or a room. It's also a good idea to get rid of things you don't need or use. You will

• 1
• 2
• next page >>

Add your voice

Know something about Cost management: Sticking to a budget?
We want to hear your view. Write now!