Personal finance is a very vast area and includes several topics such as income, expenditure, debt, saving, insurance and retirement among others. There is one very important aspect of personal finance that has not yet been mentioned – budgeting.  It is the bedrock of a solid financial base for you and your family; without it your personal financial status will be a mess.

All too often we spend as we earn, living for today and doing as the Greeks once did, “eating, drinking and being merry for tomorrow we die!” We should be so lucky – tomorrow will come and with it countless problems if you have not put a proper budget in place.

Let’s get down to brass tacks and talk budgeting.

Creating a budget helps you to see the full picture clearly. You will know exactly how much money you make each month, how much money you spend each month; how much money you save each month and on what you spend money each month.  When you are constantly on top of what comes in and goes out, you will seldom if ever be in dire straits financially.


You can set out your budget by:

  • list income(s) – all revenue that comes in for the month, usually salaries
  • list compulsory expenditure (utilities, education cost, tax, loans and other bill payments)
  • list payments towards insurance, savings plans and retirement fund
  • payment to a personal emergency fund – suppose the car breaks down and needs emergency repairs; sudden expenditure at the kid’s school or any expense that can crop up without warning.


This will give you the most realistic picture of what you have earned, what you have to pay out and how much you will have in hand to spend through the month. Remember grocery shopping which can form a major chunk of the budget, especially if you have kids has not been accounted for.
The next step is to list down all the things you will need to buy during the month, beginning with groceries, gas, car wash, dry cleaning and more.  Put approximate figures against each item.

If you are already heavily in debt you http://findthetop.com/wp-admin/post.php?action=edit&post=900will not have much money left over to spare at the end of each month. If you do have spare cash, put that money into a separate savings account to just accumulate. Trust me, one day you will be glad you didn’t waste it on something you could easily have done without!

At this point you will have an even clearer picture of the actual state of your finances. It is time to start looking at excesses and cutting down on expenses. For example if you pay to have your grass cut and your car washed, try doing it yourself to save some money and get in some exercise.  Maybe you could try eating out less often; this can be a very expensive affair month after month. Get your spouse involved in trying new recipes and making it a fun thing to eat at home.

One simple tip to practice when practicing cost cutting is to associate a good outcome with the budget cut. Tell yourself that all the money you save through the year on car washes and mowing the lawn and so many other things can be used toward a good holiday at the end of the year. That should get you motivated.

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