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The Financial Budgeting Planning Secrets


									Budgeting Secrets

The secrets to making a financial budgeting plan is far more than the practical steps you take (although
we'll get into that later), but rather it has to do with your mindset and determination to get the job done
once start it.

It's like having the discipline to go on a diet. Research shows that most diets will work if a person sticks
with it, but the majority of people just dabble a bit here or there before they quit and gain back their
weight, or go on to the next diet fad, deceiving themselves into thinking they're doing themselves some

When smoke clears though, most are right back where they've started from, needing to lose just as
much weight, if not more, than when they started their diet. That's the same with a budget. A budget,
when put together correctly, is very simple to follow, the key is to stick with it long enough to see your
debt paid down and starting to be able to put money away to build up your wealth.

If you stick with anything long enough where it becomes a habit, then it's no longer work like it was
when you first started doing it, where you had to interrupt the way you were living in order to make
some painful changes.

With that in mind, let's look at the basics of budgeting, as it's really easy to get into and set up, and if
you have the discipline to stick with it will pay you great dividends and become a way of life your really
don't think about after you get going, but is just part of the way you live.

Budgeting: Where to begin?

First of all, to launch a financial budgeting program for you and your household, you need to know the
monthly average you pay out in bills and responsibilities before anything else. So take about 4 or 5
months of your recent payments and add them up to see what the average you pay out monthly is.

You want to know exact, so don't trust a personal estimate without doing a little bit of number
crunching. It's easy to lie to yourself of vastly underestimate your monthly bills. The only way to get it
right is to take out your bills and write them down and add them up.
You can use some good budget software or budget spreadsheet which you can find free in most cases,
and may already be on your computer. If not, look for some budgeting software online and you'll find
something very quickly, again, some of it is free.

If you're familiar with Google you could use their free online spreadsheet if you choose.

Monthly Income

The second step is to now find out all your sources of income on a monthly basis. This is as simple as
writing down what you make at work, or any other source of income you may get and can count on

This is done to find out the real condition of your finances so you can work on developing a plant to pay
down your debt and invest to build up your wealth. It also will tell you whether you need to get
additional income to help pay down your debt sooner, or where you may need to or are able to cut

Monthly Expenses

Next, make a list of the fixed monthly expenses you looked at earlier, then add to that the variable
expenses you have which you may incur on a quarterly or yearly basis. For example, payments and taxes
related to getting your car license renewed every year, etc.

Also look at anything you may need to fix in your home or anywhere else for the next year. At minimum
estimate what that will be and included in your list for monthly costs once you figure it out, as it's real
money you'll need to use, and as part of your budget you can set it aside to have it when needed, rather
than just add more to your debt.

Fixed and Variable Expenses

Now take the variable and fixed expenses and list them in two different categories in order to get a good
feel and look at your financial obligations over the next year.
Many people give up on budgets at this stage because they don't take into account the fact they have to
have other expenses which aren't fixed, but yet can be predictable once you know what your goals are
for the year. It's when you have needs you don't account for that you can get discouraged and quit your
budget, so be sure to include any type of big project you want to tackle, or need that must be taken care
of in your budgeting strategy.

Setting a Budget

At this time you're getting close to setting your budget and understanding your personal financial
health. Now just add up the fixed and variable columns you put your figures in to find out where
everything stands and where you need to go from there.

Adjusting Spending to your Budget

The next step will be your toughest one, as whatever you do, it'll lead to some type of adjustment and
lifestyle change, as anyone that does this honestly will recognize they can't go on living this way without
being over their heads in debt for the rest of their lives.

In other words, you're coming to the priority part of budgeting, and that's where the change and
potential pain will come in, because you're going to have to cut back on something somewhere, or
figure out other ways to generate a larger monthly income to make ends meet. You must decide, and
that's going to involve give and take somewhere in the mix.

What is particularly empowering in circumstances like this though, once you've made the changes, is
when you get past the grumbling and shock stage, you actually start adapting nicely to the changes, and
you find it's not as hard as you thought and becomes the new way of life for you. This is an empowering
feeling and it's very real.

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Budgeting Strategy

Of course a budget is like a diet in that you've got to have at least a little bit of a release valve when
doing this, and I think applying the savings to paying down debt (for the most part) and then putting a
little away in savings on a secondary basis is the way to deal with that reality.

When you start to see your debt go down once you start budgeting from having extra money to do that,
you'll start to feel very good about yourself and your financial circumstances, and it'll make you even
more determined to stick with it for the long haul.

The best way to do this for personal encouragement is to take the card you owe the least on and start
paying that off so you can see immediate results.

Some advise paying off your credit card with the highest interest rate first, but that can also be the most
you owe on a card, and the long time it takes to pay that down can be discouraging.
What you want to do with a budget is make it lasting. So taking steps for immediate gratification and
results is important. Either way works though, if you have the understanding and discipline to pay off
the larger interest card first and still stick with it.

Monthly Budget Checkup

Finally, the last step is to give your budget a monthly checkup by going over the numbers at the end of
that month or beginning of the next month. This is to keep up with the positive results and to check if
you need to do any changes to what you're paying down or may need to do if you happened to miss
something when setting the budget up.

From this point on all you have to do is repeat this process over and over until you have a handle on
your finances, have lowered your debt, and are putting money away and/or investing in on a monthly

Budgeting Secrets and Success

If you have financial obligations with a spouse or another person, do be sure to do this together, as it
simply won't work if you're not in it together.

Budget software can be of great help, but it is just a tool in the end, and it's your determination and
discipline which will make your personal financial budget a success or not.

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