Budget: Creating/Living With

Your eyes may glaze over at the mere thought of creating a budget, much less following one. It may help if you keep in mind that the purpose of a budget is so you will have the best chance of having the money you need for medical care as well as to meet any other goals you may have. A budget will also help you feel more in control -- and make it easier for someone else to manage your day-to-day finances if necessary. 

Doing a budget is a small price to pay for the rewards you want down the road.

A budget doesn't have to be sophisticated or complex. It can be very simple. You can make your own on a yellow pad or in a notebook, buy a budget from a stationary store or use our worksheet. If it's easier, print the worksheet. If not, save it on our secure site.

If there are other members of your economic unit, you'll need to get them interested and involved in the budgeting process. For it to work, everyone will have to work on sticking to your new budget. If you have children, involving them will also teach them to spend money wisely. It seems that everyone has ideas on how other family members can cut back on spending.

We're not trying to say that doing a budget will be fun. In fact, the process could even bring up strong emotions. If it does, try to work them through. (For help dealing with emotions, click here.) Try to think of this process as medicine: it may not taste good going down but the odds are you'll be glad you did it.

NOTE: For information about dealing with a financial crunch, click here. 

A budget involves eight steps, each of which are described in the other sections of this article

Step 1. Find out what your spending patterns are.  
Step 2. Break down your expenses by core expenses, discretionary expenses and unnecessary expenses. 
Step 3. Consider whether there are ways to spend less on the things you need. 
Step 4. Think about your goals for your money. 
Step 5. Set flexible rules for a budget that fits your circumstances. 
Step 6. Create the budget.
Step 7. Give the budget a trial period by using apps or an envelope to help keep track 
Step 8. Tweak the budget as time goes along.

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