To many people, budgeting is a “dirty” word.  It is looked at as restriction, but I have come to see budgeting as freedom.  There are few things as stressful as having your paycheck run out before the month does.  Oftentimes we turn to credit cards to fill in the gap, but if not careful that debt can build and add more strain to our finances.  Here are a few tools that helped get on a positive financial path: 

1.  Track your spending.  Ok, this one is really no fun but it allows you to see where your money is going.  I recommend at least 30 days. 

1. Write down all of your fixed expenses:  rent/mortgage, utilities, car payment, etc.   

1. Log everything else that you buy:  groceries, gas, Starbucks – you get the idea. 

1. Review your expenses.  Are there areas where you can save?  Did I really spend $100 on coffee last month?  

1. Take a hard look at wants vs. needs 

1. Examine your fixed bills. Is there an opportunity to save on your cable, Netflix or internet? Would the budget plan for your gas or electric help to plan for those expenses?  Does the cost per use on your gym membership warrant cancelling or keeping?   

1. Were there shortfalls?   

1. Write it all down.   

1. Calculate your take home income and list your fixed expenses 

1. Consider your savings goals for things like an emergency fund, vacations, or paying down debt 

1. Divide what is left over for your variable expenses like gas, grocery, and basic needs 

1. Determine how much you can allow yourself for free money.  My husband and I both take out a certain amount of cash each paycheck to use on whatever we want for those two weeks.  It helps us to not use debit or credit cards and it is money we can spend without guilt because it is our “free money”.  Typically what is left over, if any, is put into a savings envelope that gets used for vacation or an evening out.  We also use cash for grocery shopping to keep us on budget.   

1. Keep it flexible 

1. Review weekly to see what is working and what is not 

1. Goals change and you may need to reallocate funds 

1. Continue to look for ways to save on fixed expenses and evaluate what is an important expense to you and what can go  

1. If you go over budget in one area, look to see where you can cut back to stay on track for the month 

There are many resources out there to help you track your spending, budget and pay off debt.  My daughter uses an app to help her keep her expenses in line and save for the big ticket items she wants, like a new game system.  I prefer pen and paper, it’s simple and keeps me on track.  Experiment to see what system works best for you. The important thing is to be aware of what is coming in and going out and to take charge of your money.  Budgeting is freedom because it puts you in control of your finances and allows you to plan for your future.   

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