Monthly Budgeting

This is the fourth entry in the financial freedom series.  The topic for today is monthly budgeting.  The main concepts to remember about monthly budgeting are.

• A monthly budget is not complicated.  Its nothing more than a plan for how you will spend your income for the upcoming month

• Alternatively, we could have a semi-monthly or bi-weekly plan to better align our budget with our pay schedule

• Write it down – no computers, spreadsheets, web sites, smart phones, iPads, software and/or other misc. electronic gadgets until later, please.

• Make it a Priority!  Your budget can't work if you don't have one

Here are some specific steps to take when creating your budget.

Please note step number 3.  The reason we want income minus expenses to equal zero is so that we know we have planned what we will do with every dollar of income.   Here is an example.

Notice that income is a positive number on the budget and expenses are negative.  When we add them all up, we should get income - expenses = 0.  

Also notice the Blow Money category!  This category should handle your entertainment and miscellaneous small purchases and other expenses. 

I hope you didn't miss the Giving,  Annual Budget and Emergency Fund savings categories above from previous postings.

Next time we'll discuss "How to Get Out of Debt".  See you then!