Balance Your Budget

• Balancing your budget will take work and sacrifice. First, you should list your income. Your expenses cannot total more than your monthly income. Next, list all of your expenses for the month. If they are greater than your monthly income, your budget is not balanced. Cut back on any unnecessary expenses first, and then try to cut back on how much you spend on things like groceries or utilities. The first month of balancing your budget you may overspend in some categories, but if you transfer money from other spending categories, you can cover your deficit.
  
  

Plan for Emergencies

• A good balanced budget will plan for unexpected expenses and possible income loss. You can do this by saving up an emergency fund to cover three to six months of your living expenses and work on eliminating debt you have accumulated in the past. You should also be planning for big expenses in the future, such as a purchase of a car or remodeling costs. Balancing your budget means you save up for these so you can pay in cash when the time comes to make the purchase or complete the project. If you do not have room in your original budget, you should try to cut back on spending each month so you have enough to reach your goals on time.
  
  

Eliminate Unnecessary Spending

• Just as a government must make cuts in unnecessary spending when balancing a budget, you need to make cuts in your personal spending to balance your budget and reach your financial goals. When you cut your spending, remember that you should be saving on a regular basis. Do not cut your spending until you have cut back in other ways. Allow yourself some money to have fun with, but make sure you can really afford it. If there is no fun money, it is much more difficult to stick to your budget because it feels too restrictive.
  
  

Build Savings

• Once you have balanced your budget, you can begin to build up your savings. The first few months of budgeting may not include a large amount put toward savings, but as you become better at budgeting, you should find additional areas you can cut back on to increase the savings amount. For example, as you become better at planning your menus and grocery shopping, you may be able to trim $100 off your grocery budget and apply that money toward savings.