Creating a Budget (and sticking to it!)
There are several different ways to budget and track your spending. I have a Bank of America checking account and I use the free online portfolio service to link up all of my accounts and track my net worth. (I also get alerts when I have bills due and I can pay them online using the Bill Pay service.) If you don't have a Bank of America account, you can use a free website such as Mint.com to do the same thing or buy Quicken for your computer if you want to keep all of those details offline. No matter which service you use, you need to start organizing your finances. If you can see how (and where) all your money is coming and going, you'll have a better idea of ways you can cut back.
A good starting point for creating a budget is to use a simple Excel spreadsheet to organize your income and expenses (rent/mortgage, utilities, vehicle, groceries, loans/credit cards, subscriptions, etc).
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I believe that most versions of Excel have a Personal Budget Template that you can use if you don't have a lot of experience with spreadsheets. If not, you can download one below.
| personalbudget.xls |
Once you create your budget, track your spending and try not to spend more than you've allotted for each category. You will likely have to make adjustments for the first few months while you figure out budget numbers that are realistic, so don't get discouraged if you aren't exactly on target at first. Also, make sure to budget money for important expenses before fun expenses. (Your student loan payment is more important than a new pair of shoes or a dinner out.)
If you have any money left over after you've paid all your bills, don't think that you have to spend it! In fact, if you don't have an emergency fund set up yet, you should really start working on putting money into a savings account until you have enough to cover unexpected expenses such a car repair or a loss in income.
Check out this website for more tips on planning a personal budget.
