5 Proven Steps To Budget Motivation

If you ever wanted to get ahead financially... if you ever thought you wanted to get out from under a sea of debt... if you ever wondered where the money went... YOU NEED A BUDGET! But how do you develop a good budget and how do you stick with it?

Developing a Workable Budget Review your last 12 months of check registers. If you find any cash withdrawals without an explanation other than "miscellaneous", you must record all cash transactions for the next 30 days. It is imperative that you know where ALL money goes.

Insure you can account for each of the last 12 months of deposits written in your register. If not, find out what they are. You must know all incoming monies.

Beginning at the top in the left hand column of at least a 4 column note pad, write all income source labels down the column-- i.e. INCOME: Wages, Bonuses, Other, Total Income, etc. Below this enter the obligations found in the check registers such as: Mortgage/Rent, Food, Insurance, Utilities, Phone, etc. Don't forget periodic expenses such as: Home or Auto Repair, Other Transportations, Entertainment, Gifts/Donations, Healthcare, Property or Other Taxes.

Leave a couple spaces labeled "Miscellaneous" and "Total Expense".

Find the payments you have made in the check registers for each expense. Enter the amount on your budget pad column 2. For irregular amounts take a three or more month total and divide by the total months. For annual or semi-annual expenses divide by 12 or 6 to get a monthly amount.

At the top of your budget pad, label the other two columns... "Actual Expense" and "Difference".

At the end of each month, enter the actual total for each expense. Determine the difference between budget column and actual column.

If there is a difference either adjust the budget or determine a way to reduce this item.

Motivation To Stay On A Budget

Step 1: Write down specifically what you are trying to do and by when. It must have a concrete time frame, it must be written down, and it must be specific and realistic. For example wanting "more money " is not the same as "10% increase over last year by October first."

Step 2: What are the obstacles? What are your inadequacies? What do you need to get there that you don't already have? What is it that's blocking you? Why aren't you already there?

Step 3: Write a plan to overcome EACH obstacle. List your action steps 1... 2... 3... etc. for each obstacle from above. Be as specific as possible. What will it take to get you past the obstacle that is blocking you from what you want?

Step 4: List the benefits to you. There is no such thing as something for nothing. You must replace a thought process and resulting action with a new thought process that will produce a desired result. There must be a benefit derived of sufficient value and meaning to you alone to be worth the effort necessary to do this and to overcome the resistance to change.

Step 5: Is it worth it? This question must be answered very carefully and honestly. If the answer is yes, do it and DO IT NOW! However, if the answer is no, if the benefit derived cannot muster the desire to overcome the obstacle, you have three choices:

Change the goal thereby reducing the obstacle; and/or increase the benefit to make it more meaningful. Drop the entire issue and get on with your life without feeling guilty.

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Bonus Step: If you really want to stay motivated you will have to reinforce your efforts through affirmations or self talk. In a few places around the house, place a simple statement of what you are trying to do and repeat the statement as often as possible. The more often you do it the faster the process

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Ten Tips to Getting Out of Debt

For some, job layoffs and unforeseen external factors have loaded them up with debt. For most, however, debt is the result of extraneous spending, poor money management, or both.

Here are ten tips to getting out of debt. Some are easier to follow than others, but all are designed to help alleviate the problem:

1. Create a realistic monthly budget for your expenses. List all monthly bills and necessities and make sure they are covered by your monthly income. Allow only the money remaining after the bills are paid to be spent elsewhere. Stay within your budget guidelines.

2. Pay off the balance on the credit card with the highest interest rate first (unless the balance on any card exceed 50 percent of your credit limit). First, pay all balances to below 50 percent of the card limit because balances above this level cause your credit score to diminish. Then pay off the balance on the credit card with the highest interest rate. If the account was opened within the past year and you have additional older accounts, close it after it is paid off. Next month do the same with the card that has the next highest interest rates. Continue until you reach the credit card with the most favorable terms (i.e., low interest rates). Use this as your preferred account. You need only four open accounts to establish a positive credit history.

3. Learn to use cash instead of credit cards. Have one primary credit card and use it only for emergencies or major necessities, such as a new refrigerator if the current one stops working. Put your credit card in a safe place, not available for everyday use. Also, do not accept increases on your credit card limit above an amount you can easily pay off in three months.

4. Use direct deposit for your paychecks. Also have a limit on how much you will allow yourself to withdraw each week and month.

5. Cut down on your discretionary expenses. This includes dining out, overusing your cell phone, and other such unnecessary expenses.

6. Evaluate your living situation. Your housing costs should be no more than 33 percent of your household income,including mortgage payments, property tax, and both property and homeowner's insurance. You can shop around for lower insurance rates, refinance your home mortgage, and look for more economical utility plans.

7. Avoid borrowing money to get out of debt, especially consolidation loans. Many people think this is a way of helping them get out of debt. However, consolidation loans are simply a means of combining debt. You could end up losing everything because you’ve tied it all up in one loan. If you must borrow, see if a friend or family member can lend you money, since the interest rates should be low or nonexistent.

8. Contact your creditors and try to work out repayment plans. Many creditors are willing to work with you in a manner that will help them get their money without having to resort to debt collectors.

9. Become a savvy shopper. Look for deals, bargains, and savings. You’d be surprised at how much you can save if you take the time to shop around. Check out the price comparison Web sites such as Shopping.com and BizRate.com.

10. Look for extra ways to make some money. From part-time work to a garage sale to taking in a boarder, there are many ways to bring in some additional income.

If all else fails, seek out help from a debt reduction specialist or counselors who can help you formulate a plan for getting out of debt and staying out. Just make sure that you check out the service in advance. Many companies are simply taking advantage of people in debt and charging them high service charges.

10 Savings Strategies

By AllBusiness.com

Saving money is an ongoing challenge for most people. Paychecks, dividends, and an occasional bonus go only so far. Therefore, it's worthwhile to develop some money-saving strategies, such as the 10 listed below.


1. Track spending and evaluate results. By tracking your spending habits, you'll get an idea of where you spend your money. By evaluating the results, you can see if you're using money for things that aren't really necessary. For example, do your monthly membership fees go to a gym you never have time to visit? Do you buy coffee every morning when it's available in your office for free? Look at all the places where you can save money; even small outlays can add up.

2. Pay yourself first. This idea is certainly not new, but it's a strategy that starts a consistent savings program. Unless your entire paycheck is earmarked for monthly bills and necessities, you should be able to put money into savings every month. If you get a raise, add that money to what you're putting aside.

3. Company savings plans. Many companies offer 401(k) plans. Take advantage of them. If one isn't available, open an IRA. Use direct deposit for these retirement savings accounts so you're not tempted to spend the money elsewhere.

4. Forget the plastic. Limit yourself to one or two credit cards with the best rates, and use them for only major purchases or emergencies. Also, pay off your credit card balances monthly.

5. Learn how to shop. The Internet provides a very easy way to compare prices. Look for lower prices, discounts, sales, and coupons. Check out price comparison Web sites, such as AllBusiness.com, Shopping.com, and BizRate.com. Avoid paying surcharges, late fees, and other fees for convenience. Shop from lists rather than browsing the aisles, and establish a firm "no impulse buy" policy.

6. Look to save on your home. Look for lower mortgage rates and refinance. Also, while paying off your home mortgage each month, round up. You can pay off the loan a little faster, and save a surprisingly high amount of the interest over time.

7. Save on utilities. Review the offers from competing phone and electric companies. Look for energy-saving appliances, and save some money by opening windows when it's warm, and using a second blanket when it's cold.

8. Be car smart. Find a mechanic you can trust before paying big bucks for unnecessary repairs. Don't buy a second or third car that will hardly be used or will sit at the train station. Look for lower gas prices in your neighborhood, and keep your engine tuned, trunk uncluttered, and tires properly inflated to save on gas.

9. Get everyone onboard. Discuss ways of saving money and establishing good spending habits with everyone in your household.

10. Read the fine print. Review your bills carefully, including your credit card statements. Errors in billing cost customers millions of dollars each year. Also, in this new age of warranties included with every major purchase, read the fine print carefully, and buy only what will be valuable for those products most likely to need service.

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