Budget: Creating/Living With

Before you can estimate where your cash should go in the future, you'll need to do some research into where your money has been going and put some thought into where you'd like it to go.

• Start by completing a Cash Flow statement. This will show you where your money went over the past year. This process doesn't have to take a lot of time. We're more concerned with rounded off numbers in a quantity that suits your economic situation. For instance if your income is $45,000 a year, you may be interested in $100 increments. A person with more income may round numbers off at the $500 or $1,000 level. The odds are you will be surprised at the results.
• For at least two weeks,and preferably longer, start keeping a spending diary for all the cash you spend -- and receipts for anything you purchase by check or credit card. By adding up all your notes and receipts by category of spending (food, clothes, entertainment, etc.), you'll see where your money is going. This knowledge will both help you identify ways to cut back and help make your budget realistic.

For your spending diary, use something that's easy to access every day at spare moments. The "notes" section of your smart phone, day-planners, electronic organizers, or a simple memo pad can all work -- as long as you can usually keep what you use with you. To keep track of money from an ATM machine, write the expenses on the withdrawal receipt, then insert the receipt into your spending diary.

Please share how this information is useful to you. 0 Comments