1. Set Goals. If you don't know where your finances are going, how can you reach your destination? Establish your own desired goals for paying down debt and saving money for the future. Goals are a road map to where you want to be.
2. Determine Current Spending. Write down everything you spend over a three-month period. Try to account for ALL of your spending. If you pay by debit card, check your receipts. If you spend cash, write down what it's for.
3. Determine Your Current Budget. Take the information from Step 2 and put it into the Budget Calculator to determine what your current budget would look like based on your present spending habits. You will be able to recognize the excess right away and see where your problem areas are.
4. Create a New Budget. Now it's time to redirect some spending in ways that will help you reach your goals. If you can, try to find ways to free up more money for savings or to pay off consumer debt.
5. Measure Your Progress. Continue to keep records, and once every three months assess your progress. Are you paying down debt? Are you building your savings? As you go along, you may need to reassess either your goals or your budget.
6. Reward Yourself! Your budgeting efforts should be a combination of hard work and fun, so create a reward system that accompanies each of your financial goals. When you make progress, reward yourself in some small way — have dinner out or go to the movies.
Hi Kevin,
ReplyDeleteDo you use any budgeting software? I am trying to set up a budget for the first time and am getting overwhelmed with all the choices out there. I like reading your blog due to the simplicity. This is the way it should be. Another thing, how will you have any time for dating with your schedule? You seem to keep a fruitful life. Thanks
Mark
I have played with some budgeting software that are cool. I like quicken and I love John Cummuta's "DebtFree for Windows"
ReplyDeleteUsually though I just use the Dave Ramsey budget forms that can be downloaded free from the website
http://www.daveramsey.com/fpu/home/?FuseAction=dspContent&intContentID=3006
as for dating, that has always been a hard one, but it seems to work out. I may not be on the same night every week but the 2 lovers can make it work.
ReplyDeletei've decided that the easiest budget is cash in my pocket, so i limit how much is there. debit card same way: limit it. so like tonight i tried to get cash from the cash machine and it failed. sometimes it just fails. dunno why. and so i had $11 and that had to be enough. this is a practical, right-now kind of budgeting that works for me because it sets limits.
ReplyDelete