Do You Have a Budget?

A budget serves as a road map for your spending, helping you find ways to save more money for your financial goals. Inefficient and wasted expenditures can be major impediments to accomplishing your financial goals. For a one-month period, keep track of every dollar you spend, whether by cash, check, or credit card. Are you surprised by how much small expenditures add up over a month?

To make sure you get the maximum benefit from the budgeting process, keep these points in mind:

• Use spending categories that make sense for your spending patterns. If there are areas with good potential for spending reductions, even if the amounts are relatively small, set them up in their own categories.
• Set up enough categories to give you a good feel for your spending patterns, but not so many that it becomes difficult and time consuming to monitor your progress.
• Include non-recurring items in your budget, such as gifts, tuition, insurance premiums, property taxes, etc.
• Periodically compare your actual expenditures to your budgeted expenditures to find out where you are having problems.
• While everyone in the family should have some cash that can be spent without accounting for it, don't make the amount so large that it detracts from your savings efforts.
• Include savings in your budget and make sure you actually save that amount every month.
• While at times a budget may not seem worth the effort, remember that it is a tool to help you accomplish your financial goals. Remain committed and stick with it.