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by 12, this is how much you would need to pay each month to get this debt cleared within a year's time. Unfortunately for some this is not a possibility. So try taking an amount you CAN afford to pay to each debt monthly and divide the total debt by that number, this is how many months (or payments) it will take you to clear the debt. If you don't have an outstanding balance on your credit card, but know that you will be using it for emergencies or random purchases, make sure to set aside a monthly payment amount, such as $25, so you don't end up with late fees for not paying the minimum balance. Total it and write it at the bottom of the list.

Savings are a luxury most people don't think they can afford. It's really not that difficult, some banks only require you keep a minimum balance of $5 or so to maintain a savings account. There a many kinds of savings. Personally I have two savings with my primary bank, one for my annual expenses, and one for vacation money. Some people can't afford to do that, with the cost of living on the rise, it's no wonder. So if that's the case you can pick an amount to save each month and watch it grow until you decide what to do with it! Even if you only use this trip money for visiting family during the holidays, it can help relieve those holiday money woes. I also have a separate savings account with my credit union for cash reserves. If your financial situation allows it, this is a very helpful and important thing to have cash reserves. This money is to be put somewhere it is not easily accessible. The money you put in this account will be for emergencies only! Then there is retirement. Some of you reading this out there are most likely just starting out and may think you don't need to start saving for retirement., and some just have never thought about it. This is what I have to say to you: What are your dreams of the after work life? Do you have a 401K through work? Are you aware that it is a very real possibility that you may not receive social security benefits when you retire? Think about that. (The ongoing theme here is THINKING!) If you save just $1 a day (that's approximately $30 a month) in a Roth IRA you could have all the money you need when you are ready to retire, depending on your retirement plans. The younger you start saving, the better off you will be. As the great Benjamin Franklin said "Nothing is certain but death and taxes." So, don't count on anyone but yourself to make your retirement happen. Write down what you would like to do in each of these categories and total it up, and then write it at the bottom of the page.

Now it's time to dig out the calculator, if you haven't already. Add up all your totals. Now look at your bank statement or last month's paycheck stubs. Add up your total monthly income. Subtract you expense total from your income. Is the number negative? This is a bad sign that you spend more money than you make. Keep this up and you'll be in the poorhouse in no time! If you even out at ZERO, this is acceptable, but still kind of scary. If you have a positive number, you are doing GREAT, keep up the good work! All that leftover money goes to pad your checking account making overdraft a smaller risk. Now look at your results, are you happy with them? Where would you like to have more money? If you need to cut back start with entertainment and work down the chain of priority towards necessities. This is the best system to maintain comfortable living.

Before you conclude your budget, make sure all your expenses have been included, and double check your math! If you get frustrated, just think of all the wonderful things that lie ahead in your future of good money management.

Learn more about this author, Amelia Borden.
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