Suggestions for creating a good/viable monthly budget, sticking to it, with leftover for savings?

Question

Serious answers only, please.
Thank you.

Answer 1

It really depends on your income and debt ratio. It is easy to find ways to save money and cut spending when you have a fat income.... It takes a lot of creativity and DISCIPLINE if not making much money. First step is to see where your money really goes. Take some time and log every penny you spend for a month.... Creating a budget... Write down what is your fixed costs... the costs you can not do anything about... like rent, car payment, etc.... then look at variable costs- telephone usage, eating out/entertainment costs, Gas, things that you could make a change in lifestyle and control thereby saving some cash by changing your habits.... Set limits on much you are going to spend on the variable costs...The cardinal rule is always pay yourself first.... Get a comfortable percentage then up it a little and have it taken out automatically and put it in a 401K, an IRA, or a savings account. Don't touch it.... Learn to live on what is left, may require bagging your lunch, may require a few less trips to the mall, may require sharing a ride to work.... there is many ways to make up the difference if you are truly motivated... Then as you progress in the pay scale, keep your lifestyle the same but continually up your savings funds percentage... success isn't necessarily making more money but managing to keep more of what you do make. This is short and simple but without details of your situation it is difficult to give personalized advice... be glad to help if you are serious...Second phase is to make your savings work for you through investments, tax advantages, leveraging, or real estate. If you let the money sit, it finds ways to evaporate for lack of a better term.

I went bankrupt after my divorce 10 years ago... my net worth now is close to a million.... Everyone who doesn't really know me thinks I am poor or average.... I still live the same lifestyle I lived when I made next to nothing... I was happy then, happier now knowing I will be retired before I am 45. You have to be serious about being finacially free and disciplined enough to do something about it....

Answer 2

Record what you spent money on for the last several months or for going forward... make a list of everything that you have to spend money on during a whole year (gas, food, electric, cell phone, etc) and then make a list of the things that you will spend money on (non-reoccurring, non-necessities).

Assign a annual dollar amount to those things. Add them up. Subtract that from your expected annual income. Is there money left over or is it a negative number? Make a spreadsheet with all of those items down the left side (as rows). Put the months of the year as column headings. Fill in the blanks for each month and each item with an estimated dollar amount. Add down each column (per month) and compare that to your expected monthly income. Are there some months that are more than others? Are some months greater than your monthly income? If so, save up for those months. You should save a set amount of money first (per month) and then use the leftovers for expenses instead of spending first and trying to find leftovers to save. Otherwise you'll always find a way to spend the leftovers.

Answer 3

Creating a budget is hard enough. Sticking to it is even harder. You have to be motivated.

First, you have to figure out what you are working towards. Write down your goals, when you want to achieve them and how much it will cost. Come up with a plan for how much you need to save each month to meet your goals.

Second, track your spending. For a month, write down every single penny you spend. Enter it into an excel spreadsheet and categorize it using categories that work for you like: clothing, entertainment, dining out, groceries, personal care, etc.

Third, take a look at what you spent and see where you can cut back. A few less dinners/drinks out. Not as many new clothes. No new CDs, etc. Now take those totals and enter them into a spreadsheet along with all of your monthly bills like rent, water, groceries, etc. (you can download budget worksheets from the microsoft website)

Fourth, do the math. See how much you have left over and if it meets what you need to meet your goals, then great. If not, figure out where else you can cut back (cheaper phone/cable plan, no gym membership, etc.) and make those changes.

Fifth, make it automatic. On the day you get paid, set up your bank account so that it automatically transfers out the money you need to save to meet your goals. Then, pay all of your recurring bills the same way. Whatever is left is what you can spend that month. Making it automatic is key to keeping to your budget.

Finally, a budget is ever changing. New things will pop up that you forgot to account for since they only happen once a year. Other expenses will go away. Learn to update your budget as you go. Use a financial tracking software to make it easy to download all of your bank transactions into your budget and it will tell you where you stand.

I also recommend that you read some books on personal finance. Knowing how to manage your money can be one of the most important/valuable skills you have. I have included a link to the references page on my website. It will give you good suggestons on personal finance websites and books that are useful.

Good luck!
pf101

http://www.personalfinance101.org/resources.html

Answer 4

Best advice: pay yourself first - sock it away in some kind of savings plan where you have to contribute a certain amount monthly. For instance, if you put away $25 each month and invest it in a mutual fund, each month you just buy additional shares, and the shares you have hopefully will increase in value. Make it a realistic amount, something you'd blow on stupid stuff otherwise, and, if you find you could sock away even more, get yourself a second plan.

My experience is that you can manage with the rest of your money just fine, you'll always spend exactly what you have, so the most important thing really is to take it off the top & sock it away. The rest will take care of itself.

Answer 5

Make a budget that covers you absolute basics, things like rent, utilities, transportation costs, food etc...a miscelleneous category is important too becuase things come up like tickets or flat tires, then total it up and see how much money you have left over for other things. Using how much money you have left over as a guide determine a fixed dollar amount that you feel that you can afford to save every week/month forever, something you can live with, and do it. The remaining you can put towards things like going out and clothing.

There are alot of budget planning tools on the web.

Answer 6

over the years I have read many book that suggest many things, in arranging a budget, but the smartest mathod has to be to make it automatic.

Meaning that if you automate your savings and and allocation of ensuring that you pay yourself first and then follow the advise of a financiual advisor, you feel most comfortable with so that you money goes where it offers you the returns and security you are hoping for.

This is not my wisdom, check out David Bach's series of books called the Automatic .......... (millionair, homeowner, start late finish rich... etc.) series

Next series of books I love to recommend are the books by Robert Kiyosaki starting with Rich Dad Poor Dad, just to re-itterate how to arrange that having money work for you rather than working for money is the way to go.

As a 25 year realtor my obvious solution to where to put your money, is Real Estate as it has everything you want to achieve your financial goals, while others pay for you to buy the investment, still the bast way to go in my opinion, but I admit I am biased.

so when you find a way to buy cashflow, and have the cashflow pay for your living expenses, you have reached financial independence, this sounds to simple, but it is the essence of creating financial independece. I will be a journey and discovery that you can practice by playing a game called the cashflow game, (goto www.richdad.com) you can find groups that play this game in your area, or you can play it on line, its a great way to learn how to rethink our approach towards money and how to use it.

Good Luck

Answer 7

As part of a 2003 set of laws, the government set up a website dedicated to consumer education on money management.

Check out http://www.mymoney.gov and see if this is what you are looking for.

Answer 8

Check out Dave Ramsey.

Answer 9

Track your spending. Write down for every little thing and then put them in categories.

Answer 10

You need proper management for that read some tips on it on this site