Personal Budget Guidelines

A personal budget helps you to keep financially on track and make sure that you are living within your means. Certain guidelines will help you to create an easy-to-follow budget that helps you stick to your financial goals and allows you to meet any unexpected expenses and reductions in your income.

These guidelines are:

• Set your goals thinking in terms of short, medium and long-term. Include your financial objectives such as education goals, holiday, retirement, home purchase and more. Include these goals in your budget figures, setting money aside to achieve them.
• Make a note of your income and record this in your budget. If you receive bonuses and unexpected income from time to time do not include this in your budget. Only include income that you are sure of receiving. Anything else can be used to clear debt, invest or make a purchase of a desired item that may not necessarily be an essential.
• List all your necessary expenses ensuring that you include annual and quarterly expenses also. You will get these figures from your statements and bills. These expenses are added together and deducted from your income to make sure that you are living within your means and that you can cater for your goals and your living expenses.
• Don't forget to include entertainment and other sundry expenses in your budget. These costs are the ones that can be changed if your budget is tight -- but you do need some recreational allowance. Keep a notebook of your spending if you are unsure of how much you actually pay out on miscellaneous items. You are likely you be very surprised at just how much you do spend.
• Always put some money aside for investment. Build an emergency fund which should be able to cover three to six months of expenses. This will help you to cater for the unexpected and keep you in good stead should an emergency occur. It will help avoid having to take from your valued investments.
• Concentrate on erasing debt and include a program of debt reduction in your budgeting figures. Any extra income that is received can be paid towards your debt -- things such as tax rebates, bonuses and other financial windfalls.
• Review your budget on a regular basis. Adjust as necessary. This will keep you on top of your finances. Remember that your budget is not set in concrete -- it is a working document that helps you to control your finances.

Follow these guidelines for your personal budget and you will have a healthy financial future.


Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Lyn invites you to receive a free report on ways to Cut Your Grocery Bill... this will help with your budgeting.

For tips to erase debt.

Please note this article does not contain specific advice and is for information/education purposes.

A disclosure statement is available free on request.

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How to Plan Your Budget

Payday loan is a type of loan that can be acquired quickly and easily. It provides everyone who has a job to borrow small amount of money to finance emergency and unexpected bills, car repairs, tuition fee, and grocery. Payday loan lets you have the money you need to survive until the next paycheck arrives. But if payday loan is available to virtually anyone, does it mean that anyone who fell short of cash before the next payday should use this service? Knowing that there are companies willing to lend you money when in dire emergency is good news but there is nothing better than a well-planned household budget.

Budgeting is very important. It puts you and your household expenses into the right perspective. It puts you on track of your financial obligations which in turn, provide you with the knowledge of your actual financial standing in the future. Budgeting makes you more responsible in handling your money. It prevents you from over spending and keeps you from borrowing money.

How to plan your budget?

Okay, budgeting is a headache but this headache, no matter how intense should be injured at all times. If not, you will end up short of cash before your next paycheck arrives. You see, many households that fail in planning their budget are spending more than they should have. In other words, they buy from money they don't have. Some still fail even if they have a good budget because they do not follow it. So, this is where you should begin. Know how much money you have, know where it all goes, and follow your budget strictly as if your life depends on it.

The best way to plan your budget is to list down all your sources of income and where all your money goes.

First, list down your income: your wages, bonuses, investment income, incentives, miscellaneous income, and every amount that comes in for one month. Take the total. Then, deduct from your total income all the taxes you pay from local and state income tax, Medicare tax, social security tax, federal tax, etc.

Second, list down all your expenses: fixed and flexible. Fixed expenses are those that remain constant each month. They are home, utilities, health and medical, investment and savings, and transportation expenses. Flexible expenses include food, entertainment and recreation, clothing, debt payments, pet (if there is any), and miscellaneous. The data may seem to be overwhelming but in order to plan your budget effectively you have to go through all these. Being able to know how much you spend from each of these will help you plan out your budget well.

Now, list down your home expenses. How much do you pay for rent or mortgage? How much do you pay for home improvements, home repairs, home maintenance, Homeowners Association dues, property tax, and homeowners insurance? All of these should be listed and should be accounted.

Compute your monthly utility bills: water and sewer, electricity, cable subscription, telephone (cell phone and land line) and internet. For transportation, compute your car maintenance, auto insurance, car payment, gasoline, tolls, taxis, subway, and bus expenses.

List down your medical or dental insurance and fitness fees. Investments and savings include college fund, bonds, stocks, mutual funds, 401K or IRA, emergency fund, and savings.

Since these are fixed expenses, you should be able to deduct them from your monthly income immediately. The amount that is left will be allocated to the remaining obligations including food (groceries and dinning out), clothing, pets (dog grooming, vet, and boarding), and miscellaneous including gifts, household products, toiletries, etc.

After doing these, you will see how much you spend against how much you earn. Here you will know if you are spending too much or less. If you spend too much, make some adjustments so that you only limit your expenses to what you earn, or less. The key to successful budgeting is allocating the right portion of your money for each financial obligation within the walls of your monthly income. Spending beyond your budget will put you into a great financial problem so make sure that you plan your budget properly and stick to it all the time.


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5 Types of Budgeting Money Methods

There are so many personal finance programs and books on the market, trying to decide where to begin can make your head spin. Besides the myriad of options on the store bookshelves and online sites, there are dozens of popular, national programs that can cost hundreds of dollars. I've seen people spend over $100 to $150 on such programs and upon completion ask the question, "okay, how do I get started." I find it unbelievable to spend that much money and time on a program and still not know how to get started.

Most of these books, programs and seminars focus on the much larger picture of Financial Planning and wealth building which are great resources to pursue after you get your spending under control, paid off all your debt, live within your means and have money left over to invest. To get started in the world of personal finance, most people just need a simple budgeting program to help them get started.

Despite all the options available, getting started with a budgeting process can be fairly simple. There are just a few categories of budgeting tools available. I'll give a brief description of each one and you can decide what's best for you - or read my next blog on "How to select the best budgeting tool for you." A good budgeting coach can also work with you to provide solid advice on what's best for your budgeting needs and match your skills to what's available on the market.

Method #1: Pencil, paper and calculator

Certainly the oldest method around, it works fine but has it's drawbacks. Access to the budget forms is the easy part. You can either create some simple forms on paper that you're comfortable with or you can search for the forms online that you can download for free or very inexpensively. That's the easy part.

The downside of the pencil and paper method, even with assistance of a calculator, is that the user must know the basic financial calculations. Even if you are savvy in the mathematics, there is the issue of lack of speed, accuracy and repeatability. Making changes is difficult at best and each month the process and amount of time needs to be repeated. With the amount of effort required, most people simply give up.

The pencil and paper method is good, however, for first time budgeters that need to keep track of your daily spend. Keep a piece of paper in your wallet or purse and write down everything you buy, even if it's on credit card or via check. Doing so will enable first time budgeters to establish a baseline of where their money is going. (Cost: approx $0)

Method #2: Computer Spreadsheet such as MS Excel

Most computers have some type of computer spreadsheet program such as Microsoft Excel or Apple Numbers installed. Such a spreadsheet program allows you to create an electronic form (called a spreadsheet), embed all the financial calculations and then simply enter your financial data. The computer does the calculations dynamically and you can see your results interactively on the screen.

There are several advantages of using a computer spreadsheet:
• Time savings increases each month
• Accuracy of the calculations
• Repeatability month after month

The downside, If you are not an expert at MS Excel or the finance calculations, it will be difficult to create your own budgeting forms from scratch. However, there are some excellent MS Excel budgeting forms on the market that are "ready made" for first time budgeters. Some of these MS Excel forms will even generate pie or bar charts to display easy to understand. Do some research online and find one that meets your functional requirements and meets your budget. Make sure your computer has the MS Excel program installed on your computer. (Cost: less than $20 for the forms; MS Excel extra if not already installed on your computer).

Method #3: Computer programs such as Quicken

My comments on computer programs such as Quicken are relative to their capabilities as budgeting tools, not financial planning tools. Many of these programs have the advantage as broad financial planning tools that can be used for everything from budgeting to wealth management and even bill pay, but usually lack good budgeting capabilities.

My definition of a budgeting is a set of learned behaviors that help you manage your expenses relative to your income and provide you with a plan to get out of debt and reach your financial goals.

Many of the computer programs simply look at your past spending habits to create your budget. So if you had a budgeting problem in the past, it is simply carried over to succeeding months. The computer program does not correct any spending or behavior problem that led to poor budgeting.

The disadvantages with these commercial financial planning computer programs include:
• Expensive. For Quicken you will shell out $40 for just the Starter Edition, $60 for the Deluxe and $90 for Premier.
• Complexity. Again, most are designed for much more than budgeting and can be difficult to use, especially for first time budgeters.
• Time incurred in learning and using these programs can be lengthy for simple budgeting requirements
• Don't teach good budgeting techniques

If you are going to invest that kind of money and time, seek out a budgeting program that actually teaches you how to budget!

Method #4: Online budgeting programs such as mint or Mvelopes

Convenient and free budgeting tools are popping up everywhere on the internet and as smartphone apps. The accessibility is hard to beat but which one do you choose? Are online budgeting tools even a good idea from a security standpoint?

Let's start with the last question first. You need to be aware and be comfortable with the idea that you are sending your financial data back and forth over the internet. This is very different than online banking. When you perform electronic funds transfer or electronic bill pay through your bank, you have all the protection that your bank has deployed to protect the information. That may not be the case with a non-banking institution set up with online budgeting programs. Just do your research and be mindful of security issues.

If you are okay with the security issues, then you probably did your research and selected an online budgeting tool that you're comfortable with. That's the highest priority in selecting these tools.

The advantage of these tools is the ubiquity of having your information on various media when you need it: On your smartphone when you're shopping, on your laptop when you're at the library or coffee shop, or on your home PC when you're at home. Virtually anywhere you have browser access to the internet you can access your budget to see if you are on track.

Method #5: Behavior-based Budgeting Method

There's a new method I'm proposing which can include any of the 4 methods above, but incorporates a new way of thinking or behavior. If you apply my definition of budgeting: a set of learned behaviors that help you manage your expenses relative to your income and provide you with a plan to get out of debt and reach your financial goals, then any of the 4 methods above will work because you changed your behavior!

Make a decision today to place budgeting high on your priority list, change your behavior, and start to see your financial goals realized.


Michael T Kastler is a Budgeting Coach and author of the personal finance book, "Get a GRASP on Your Budget and Your Cash" and multiple budgeting worksheets. His budgeting money tips blog that helps individuals become debt free and meet financial goals can be found at Budgeting Money Tips.

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5 Tips on Saving Money

Even on a Tight Budget

With the average American saving less than $400 a year, it would seem pretty obvious that we have trouble saving money. Add to that the statistic that the average American household carries over $100,000 in debt (which includes secured and unsecured debt as well as home mortgages) it would seem fairly obvious that we are also on tight budgets. So, how do you save money and build wealth when you are just barely making ends meet and trying to dig your way out of debt on a tight budget? Here are five tips to get you started.

Tip #1

Track all of your expenditures for at least a month and find out where your money is going. When I say all, I mean all. If you buy a pack of chewing gum with the change in your console, write it down. The best way I've found to track my expenses is to ask for a receipt every time whether I'm paying by debit, check or cash. You don't have to keep the receipts forever, but it's the best way to determine where your money is going and if there are any places you can save money.

As a general rule, people aren't as overextended as they think they are. We say we are living paycheck-to-paycheck but in reality we are "treating ourselves" on a fairly regular basis which adds up to a significant amount of money over time.

David Bach calls this the "Latte Factor". Instead of buying that Starbucks coffee save the money you would have spent on it instead. You'll be amazed at how much this will add up to overtime.

Tip #2

Make your savings plan automatic. If your company offers direct deposit, have a portion of every paycheck deposited into a savings account. If your company doesn't offer direct deposit, ask your bank or credit union to automatically transfer money from your checking account to your savings account monthly - or even better - each time you get paid.

Tip #3

Put your loose change in savings. Instead of throwing your change on your dresser, or in your console, and then raiding it now and then for purchases, take this money down to your bank and deposit it into your savings account. It adds up a lot more quickly than you think. Even a small jar can hold a large amount of money in change!

Tip #4

Take advantage of free money. If your company offers matching retirement funds, be sure to contribute at least the matching amount into your retirement fund - otherwise, you are throwing away free money every payday!

Tip #5

Look for bargains. Not everything you buy has to be brand new. In fact, you will save thousands of dollars by purchasing used items over new. Some people don't like the idea of wearing used clothing. I've actually found brand new, tags-still-on bargains that cost the original buyer hundreds at a department store and, for whatever reason, the outfit was never worn and turned over to a consignment shop selling for a fraction of the price.

Cars are another thing you shouldn't buy new. That brand new luxury vehicle will lose thousands of dollars worth of value as soon as you drive it off the lot. In fact, it will lose 15-20% of its value every year. So, why in the world would I want to spend $25,000 on a brand new car that I can buy for $16,000 two years later? Why not let someone else take that hit? I would rather buy some new leather air freshener and save the $9,000 instead.

This is just the tip of the iceberg. I guarantee you that if I went through your bills and receipts for a month I could find ways that you could save money. My best advice is to start saving today--even if you start small. You'll soon develop the habit of saving money and be able to increase your savings amount so that you can stop being broke and begin to build wealth.


My name is Cheree Miller. I'm not a financial counselor or legal advisor. In fact, I've made some poor choices in my life. I've been broke, with creditors calling, writing, and sending court summons. I've had my bank account garnished and wondered how I was going to feed my family. But, I can tell you that you can learn to make good choices where your money is concerned. You can get out of debt if you remain focused on the end goal instead of wallowing around in a pity pool feeling sorry for yourself. Better yet, you can retire rich if you start saving for your retirement now!

Life was meant to be enjoyed. For more resources on getting out of debt and living debt free, visit http://www.imdebtfree.net. While you're there, sign up for my free newsletter with more tips on how to get and stay debt free, and receive my free report "101 Powerful Tips for Legally Improving Your Credit Score".

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