Most people are simply not inclined to use spreadsheets, balance checkbooks or lay out a formal budget. There are many reasons for it, but the most important is that we associate “preparing a home budget” with “tedious, boring, complicated and taking too much time”. No wonder we don’t do it!
Making the effort to outline their expenses against their income can have huge rewards. In fact, it’s critical if you want to get out of debt. You need to know where your money is going. You can also identify trivial expenses that when cut out, can leave some money to pay off your debts.
Your budget should include your monthly income, and everything you spend your money on on any given month. Yes, you need to keep track, and we cannot stress it enough. You should also leave room for unexpected expenses that may come up.
You can use spreadsheet software, either from Microsoft ( MS Excel) or a free one from Open Office.org or Google Docs. If however, you don’t feel comfortable using spreadsheet software you can just use a legal-sized pad and a calculator. You don’t really need to get fancy here, the main idea is to know where your money is going.
If you decide to do your own spreadsheet on a piece of paper, divide the page into two columns. In one, list income; on the other one write down all monthly expenses. You may want to refer to your bank statements so you don’t miss any expenses.
In the expenses column make sure you include all your monthly bills like water, phone, gas, car payment, cell phone, groceries, cable, tuition, etc. Then add at least 10% for unexpected expenses, if you can.
Make it a priority to get out of debt. Set a realistic goal to get out of debt and then start saving the money you are now paying on interest. You can live the life of your dreams if you decide to pay off your debts and start saving towards your retirement. You can do it, it takes knowledge (look at the Debt into Wealth program, it’s a must-have to get out of debt in record time), perseverance and discipline.
Don’t listen to people who are deep in debt; look for people who saved money and follow their advice. Use your own judgement when shopping. And decide today that you will do whatever it takes to enjoy a debt-free life. You deserve it!
Article found on www.overcome-debt.com/developing-a-budget
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