Monday, March 22, 2010

Start with a budget to make your money dream come true

1. Set a goal – at the top of your list of money goals should be an emergency fund. Next, list your long term big ticket dreams, such as paying of debt, buying a car, financially your kid’s education. Write down more immediate personal and household needs and wants that you hope to purchase with the next six months. Finally, note small money goals, such eating in a restaurant once a week or getting a manicure once a month. Next to each goal, estimate the amount you need.
2. Aim to Save – suggest paying your self first. This means putting 10% of your monthly gross income into a general saving account or retirement saving account.
3. Track spending – starting today, starch a small notebook and pencil in your purse and note every single daily expenses. Count a small stuff; news paper, coffee, candy bars, child lunch money. Include the exact number to the centavo. Follow through for at least one week, preferably a month. This will you and eye opening look at your spending habits both good and bad.
4. Tally expenses – set up the following categories; housing, transportation, insurance, food, personal care, medical, children and miscellaneous. Create sub-categories for each, such as cosmetics and clothing under personal care, and so on. Add the expenses in each category. If you only tracked your spending for a week, multiply by four for monthly total.
5. Identify waste – as you survey your spending pattern, predict that more than an expenses will make you ask. “Did I really need this?” Assess the ways you’re throwing away cash on little things and make that the first place you look for money to kick start your “spending less, save more”.
6. Take back money – expenses against goals on your wish list. Start by cutting in half things you can’t use that much. Think of budgeting not as a sacrifice, but as a make life better mission!

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