How much time would like to spend budgeting for your personal finances each month? Hours? How about 20 minutes.
To be a winner, you've got to be as honest as possible on paper.
If you are, you'll know exactly how your money comes into and goes out of your life, and you'll be able to take complete command of that process.
First, dig up all the dirt on yourself.
Get out all the bank account statements, investment statements, bills, receipts you can find.
Everything that documents money coming or going.
You want to be able to get a monthly average - the more information, the better.
Next, list all your different income sources.
Beside your regular job, document any other income sources.
If your employer already takes taxes out of your paycheck, just use your net pay numbers.
Add all of this up and label it "monthly income".
Next, get together all of your documented expenses.
From your past bills, you should be able to come up with a reasonable prediction of how much you're going to pay in bills in the coming month.
Everything from mortgage to car loans, grocery bills to gas bills, insurance to investments, savings - everything you spend money on goes in this section.
Take all of these expenses and divide them into two categories: fixed expenses and variable expenses.
If a certain bill stays pretty much the same from month to month, label it "fixed expenses".
This would be your mortgage, car loan, cable/satellite bill, and others like this.
You'll find that most things in this category are quite essential, but seldom change in amount.
Next, take all your expenses that change on a monthly basis: gas, food, clothing, eating out.
Label them "variable expenses".
You'll find that you can be pretty flexible with the items in this category.
Add up your income.
Add up your expenses.
If you have more income than expenses, you're in a good starting point.
You can take the money that's left over and do something with it like put it in savings or pay off debts.
If you've got more expenses than income, you have to change one of the categories.
You can either increase your income or decrease your expenses.
Remember, the goal is to have equal income and expense numbers.
Money left over is sure to be wasted.
Every nickel should be assigned a category by the end.
Anyway, the first place you can cut easily is in your variable expenses.
These are your non-essentials; it's easier to do without a dvd rental than having your electric shut off.
Finally, every month go over your budget.
If you check your progress every month, you'll start to make headway.
These review sessions are much easier and shorter than the initial budgeting session.
You'll have a chance to see where you succeeded and where you need a little more work.