Thoughts on Debt

Many people find themselves in hard financial times and are wondering what they can do to dig themselves out of the hole they are in. Well, the key to it all is devising a budget and sticking to it. Many of us believe that we are already living on a budget, however, unless your budget includes a savings, then it is really not a budget. A budget is not scrimping and living paycheck to paycheck paying whatever bills you can each week, it is much more than that. It is a financial plan, the foundation by which you determine how much you can afford to spend on the extras. Built into your budget must be a savings plan that will allow you to put no less than 5% of your income aside for emergencies. I personally prefer a two savings plan, where you divide your savings into 2 separate accounts, one for true savings and one for savings for special things that you would like to do like a vacation, or for a special item you want like a new TV. This is a good way to be able to reward your hard work saving and feel a benefit from it. It will make you feel less deprived in the long run if you reap some benefit from the savings.

In order to create a budget your monthly income must exceed your monthly expenditures. For instance, you can not budget your money if your monthly expenses are $3000 per month and your monthly income is $2400, this will not budget out. If after writing down your expenditures for a month and your income, you find yourself in this boat then it is time to trim the fat off your regular monthly spending and if you still can’t get your expense low enough then it may be time to consider picking up an extra job. The fact is that a budget is a plan by which you spend, and without one you are free falling into a life of poverty.

Keeping your life in balance will allow you the peace and harmony that you seek from life. Having enough money to pay the bills with a little left over will allow you to sleep better at night without worry. Take the time to work out your budget and you will see how easy it is to keep your finances under control.

Many people find themselves in hard financial times and are wondering what they can do to dig themselves out of the hole they are in.  Well, the key to it all is devising a budget and sticking to it.  Many of us believe that we are already living on a budget, however, unless your budget includes a savings, then it is really not a budget.  A budget is not scrimping and living paycheck to paycheck paying whatever bills you can each week, it is much more than that.  It is a financial plan, the foundation by which you determine how much you can afford to spend on the extras.  Built into your budget must be a savings plan that will allow you to put no less than 5% of your income aside for emergencies.  I personally prefer a two savings plan system, where you divide your savings into 2 separate accounts, one for true savings and one for savings for special things that you would like to do like a vacation, or for a special item you want like a new TV.  This is a good way to be able to reward your hard work saving and feel a benefit from it.  It will make you feel less deprived in the long run if you reap some benefit from the savings.

In order to create a budget your monthly income must exceed your monthly expenditures.  For instance, you can not budget your money if your monthly expenses are $3000 per month and your monthly income is $2400, this will not budget out.  If after writing down your expenditures for a month and your income, you find yourself in this boat then it is time to trim the fat off your regular monthly spending and if you still can’t get your expense low enough then it may be time to consider picking up an extra job.  The fact is that a budget is a plan by which you spend, and without one you are free falling into a life of poverty.

Keeping your life in balance will allow you the peace and harmony that you seek from life.  Having enough money to pay the bills with a little left over will allow you to sleep better at night without worry.  Take the time to work out your budget and you will see how easy it is to keep your finances under control.

The best way to stay one step ahead of the rising cost of everything is to budget. This has been something that I have always struggled with, so I went online to find some tips on how to create a budget, and came up with a realistic way to do this.

You must first take a look at what you are spending so that you can adapt it accordingly. Unfortunately this is not always easy. We can all account for how much we spend on utilities every month, but figuring out the smaller more trivial amounts that we spend each month can account for a lot of our missing money, and we don’t even account for it. In order to take a good hard honest look at your budget, you must first account for every dime you spend in a month. Now, I have found that tracking your spending from one end of the month to the other is easiest if you do it all out of one account, on your debit card or credit card. Otherwise you must save every receipt in order for your assessment to be accurate, let’s face it for most of us keeping track of each receipt can be tiresome. Some people say that you can just keep track of your spending for a week and then figure out a monthly budget, but I prefer doing it for the month. Sometimes there are expenses that occur at different times of the month and so I have found that looking at my monthly expenses gives me a little better overview.

Now, once you have tracked your spending for an entire month, put it down on paper into categories. Monthly bills on one side, these are the expenses that you may be able to cut back on a little, but they are necessities like house payment, electric, fuel oil, water, basically all the things that must be. On the other side make categories such as entertainment, dining, cigarettes and/or alcohol, clothing, and any other category that applies to your life. Lastly, make sure that you include your monthly grocery bill and auto gasoline bill on the other side, as these are necessities that can be reduced, but more than likely can not be eliminated.

Now, on the top of your page write down your take home income, how much you cleared after taxes. In an ideal situation you will be able to save 25% of your salary. If the amount that you have spent is more than 75% of your take home, then it is time to start cutting back.

The more you can save, the more you can spend. Now is the time to really tighten the belt and cut out all but the necessities and if you can use coupons, shop sales, and shop around for the services that you need such as car insurance and phone services, do it. The more money that you can keep in your pocket the better.