How to Budget Successfully
Budgeting is like dieting, for it to work you must set realistic goals. The first step is to outline all your relatively fixed monthly bills as discussed in my previous post. Once you know these, go through your monthly bank statement, if you don’t get one in the mail anymore, download it from the bank’s website, and categorize all your expenditures for the past month. What you discover may surprise you.
Some great categories to start with are groceries, eating out, entertainment, charities, clothing, gas, car maintenance, and add others as they fit with your situation. Once you have everything categorized, add up your expenditures for each category. Yes, you really spent that much money last month eating out or shopping at Target for stuff that you can’t even remember two weeks later.
Once you see where your money is going, it is easier to see areas where you can cut back. Maybe instead of eating out 3-4 times a week you could eat out twice, or eat out at less expensive restaurants, or skip the appetizers and alcohol with dinner. These little savings can really add up if you place the money you saved into a special savings account for rainy days. Then, when you feel like splurging, use the money in this account rather than charging up your credit cards.
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