Saturday, January 22, 2011

11 Tips On Budgeting


These 11 Tips On Budgeting will help you control one of the most important piece of your family financial program. Learning how to save money will let you create a great personal budget planner. It is highly essential to know exactly your household budget in a week, how much money you have coming in, and how much is going out. I am sharing with you effective budgeting tips. These budget help is aimed at making you see the big picture and help you achieve a debt-free living. 

Budgeting Tip 1:  Get the whole picture by collecting all checking account and credit card statements for the last year.  Collect all cash receipts for the last month including cash spent on co-payments, mocha's, haircuts, etc.  Then collect all receipts for financial contributions to charity, including Girl Scout cookies, including all pay stubs, deposit receipts, etc.

Budgeting Tip 2:  Record the whole expenses.  By doing budget tip 1 you'll be able to see the picture of your previous year's spending. You can print and use our Family Budget Worksheet  to make this job easier. It will normally take you a lot of time  with a calculator and scratch paper.

Budgeting Tip 3:  Check off the lines on your documents as you account for them in a budget item.  This an effective method of ensuring that don't put the same thing in more than one item and you don't forget anything.

Budgeting Tip 4:  Formulas:
    Convert regular weekly pay to monthly:  Weekly Pay x 4.333 = Monthly Pay
    Convert bi-weekly pay to monthly:  Bi-Weekly Pay x 2.167 = Monthly Pay
    Convert annual totals to monthly amounts by dividing the total by 12.

Budgeting Tip 5:  The Family Bills For Monthly Expenses part of the Worksheet is just for regular monthly bills, savings and investment.  If insurance, for instance, is billed monthly, it would go here.

Budgeting Tip 6:  If the insurance, however, is billed less often than monthly, the total annual amount would be divided by 12, and that number would be listed in the Impound Budget For Non-Monthly Expenses.  Don't forget to list the month it's due to be paid.  This 'Impound' section is a powerful and unique tool to save monthly for all your annual expenses and avoid those nasty surprises.

Budgeting Tip 7: Cash Budget-Monthly section should contain everything that you regularly pay for cash..

Budgeting Tip 8:  After totaling everything, you'll be taken aback to find out that your expenses are larger than your income which is normal. The amount that exceeds your  income is the amount you add to your credit cards and other consumer credit balances every month.  Note:  When I did this the first time I discovered I was spending $ 250 more than my income each month.  If your income is larger than your expenses, the difference is the amount you can add to savings, etc.

Budgeting Tip 9:  Be sure to review your budget worksheet to see if you can spot any errors, to try and find areas where you feel your spending is excessive, and to consider if any expenses (maintenance, insurance, taxes, etc.) will increase over the next year...make necessary adjustments and re-total.

Budgeting Tip 10:  Make sure you keep a savings balance for a "rainy day" that matches 6 months of your net income.  After you've accumulated that, you can begin investing and buying some of those things you just want.

Budgeting Tip 11:  Giving or donating is as important as paying a bill.  Give this a try!  You should have an amount designated on your family budget for giving.  Even if you don't take part in a regular charity or church giving program, make giving part of your budget.  There is a great deal of evidence, from 2,900 years ago right up to the present, that what you give comes back to you multiplied.  Do it for a year and see what happens.

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