1. Money

How to Budget Successfully

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It's one thing to sit down and decide you need to budget. Most people realize that, even though they don't successfully manage to budget. Many will even sit down look at their expenses and bills and come up with the ideal budget that allows them to continue to spend money on the things most important to them or that sets goals that just can't be achieve. The key to really being successful at budgeting is to take a multi-step approach to budgeting. Doing these steps in the right order will make it easier for you to budget successfully in the future.

1. Before You Budget

One of the reasons people fail when they begin to budget is that they don't believe in the budgeting process and have a difficult time determining how a budget will help them improve what they want to do. Before you sit down and hash out the numbers for your budget, you need to decide what you want your budget to do for you. If you know that the budget will help you get out of debt and to get financially secure this can help you. It may be to help purchase a home or to have money to do the things you love like dream vacations . . . read more

2. Set Up your Budget

Once you have decide what you want your budget to help you do, then you can set up your budget. The clear goals and guidelines you just set up will help you make the sacrifices necessary to make your budget work. Writing down your expected expenses and getting them to equal your income is one of the easiest parts of the entire budgeting process. As you set up your budget make sure that it includes money for you to reach your goal . . . read more

3. Tracking Your Budget

Once you have created your budget, you are ready for the hard part: following it! This is the place when people who attempt budgeting fail. It can be time consuming to record your transactions each day and subtract them from your account and the correct budget category. You can transfer between categories to cover areas where you had not estimated the correct amount for the month, but you must make sure you expenses do not exceed your income. You can use computer software, the old-fashioned pen and paper budget or you can use the envelope system to make your budget work for you . . . read more

4. Evaluating Your Budget

After the first month you will need to evaluate your budget. This is essential to getting a working budget. Ideally you should evaluate every month for the first six months that you budget. You should also be able to identify your budget weaknesses. This allows you to make adjustments to areas where you may have estimated the wrong amount. After the first two months, you may be able to cut your spending back even more than you originally thought and increase the amount you put towards the goals you set for your budget . . .read more

5. Setting Goals for Your Budget

After you have reached the goals you originally set you may want to set new goals to reach. Additionally you can set goals that allow you to reward yourself for meeting new spending limits. For example you may reward yourself with a nice meal out if you meet the goals you have set for your grocery budget each month, or if you have managed to eat at home for the entire month, you can reward yourself with a meal out at the end of the month. The same thing can go with any category or reward you want. It can extend to your entire family as well . . . read more

6. Cutting Spending

Each year you should evaluate areas where you can cut your spending. It is too easy to just assume that your bills are set in stone, and that you cannot do anything to lower them. However, if you shop around every year or two for your utilities such as Internet or satellite television and other expenses such as car insurance or gym memberships, you may find that you will save quite a bit of money with just a few hours of work. As you do this evaluate whether or not you need the level of services you are getting and cut back if you can do so comfortably.

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