The Budget

"The Budget" use to a frighten me. Budget - what budget, we had never had one.

Now the budget is one of the best tools we have in lowering our debt. Having a budget allows us to tell our money where it needs to go, instead of wondering where it went.

To make a budget you will need three things:
1. How much income you have coming in.
2. How much you have going out in bills.
3. And the most important - your spouse or significant other

To find out the amounts you have been spending in certain areas check the previous two months of your credit card statements, check registers, or online if you have online account access. (Doing this was a real eye opener for me, I noticed for the first time where our money was going - fast food restaurants, Target or Walmart, other stores in malls, sit down restaurants, and gas stations. Any correlation there ?:0) )

Once you have that, sit down with your spouse or significant other and make a list of budget categories. An example of what a budget could look like is:
Mortgage/Rent
Utilites (list them out separately)
Car Insurance
School Lunches
Child Care
Sports Fees
Gifts
Clothes
Hair Care
Pet Care
Med. Copays
Groceries
Car Gasoline
Entertainment
Eating Out
Savings
Fun Money
Loans (list them out separately)
Credit Cards (list them out separately)

Fill in the categories with the average amount of money you spent for one month. Some items like loan payments will be easy since they are always the same, others will just be an approximate amount. Once you know what you are spending for one month you can now look at areas you think you want to cut.

Making a budget is one thing, sticking with it is another. You will hit bumps (we have many a time) and it took us 3-4 months to get a budget going that was doable. At first I tried to cut too much from too many categories and it just was not working. The trick is to start slowly and gradually lower your expenses.

It gives you a feeling of empowerment to be able to look at your budget and see exactly where your money is going to be going for that month. If you have never done a budget try one for March. You have the next week to gather all of your information and plan your month of March out on paper. :o)