Budget Management Tips

Organize all of your income, debt, expenses, and necessities into a readable format. When I first started building a better budget I dimply used an Excel spreadsheet.

Debt - Anything that must be paid off each month. This includes (but is not limited to): credit card payments, loans (mortgages, personal, cars), legal obligations (child support), and contractual obligations (rental agreements). Also, if you have a child, consider placing their cost of education in this category.

Expenses - Anything that could be considered a benefit of living in the modern world. These include bills such as: cable/satellite, Internet access, monthly rental services, music services, and small expenses that are incurred throughout the month (coffee, newspaper, gas, and tolls).

Necessities - These are things that are required for life: food, water, electricity.

Subtract your total owed (debts, expenses, and necessities) from your monthly income. This is your preliminary budget.

If your budget is in the red this means you’re not going to be able to make your payments without use of a credit card or some other means of personal credit. If you find yourself in this situation, I suggest you seek out the advice of a professional debt counselor, and they will be able to get you going in the right direction.

If your budget is just breaking even, or you don’t have a lot of breathing room at the end of the month, then I’d recommend these simple steps:

• Speak with your creditors and see if you can negotiate a different payment plan.
• Eliminate some of your expenses! It may be as simple as not buying a cup of coffee every morning or you may have to live without cable for a few months (gasp!) but whatever you do, make sure you end up in a comfortable financial situation where you can put money away in a savings account every month.
• Speak with a budget management specialist. They can help make recommendations on what lifestyle changes you need to make in order to improve your financial situation.

[tags]budget management, debt management[/tags]