Steps To Preparing A Personal Budget

Preparing a monthly budget is the key to financial security. If you want to make better use of your money, you must learn to take control of it. That means budgeting for today’s needs and tomorrow’s plans. Here are some steps:

* Figure out what you spend. List your monthly living costs including food, shelter, clothing, medical, transportation, utilities, entertainment and so on. You may need to “track” your expenses for one month to get an accurate accounting of what you spend on items such as food, gas, and entertainment.

* Total your after-tax income.

* Subtract monthly expenses from monthly income to see how much is left over to pay off debts, including credit card debt.

* Start a savings account. Pay your savings account just like you would a creditor.

Use common sense to stay out of trouble. If you’re a compulsive shopper who can’t resist a good deal and is chronically late on credit card payments, put your credit cards away until you can learn to live within your budget!

Ask yourself a few simple questions:

• Do you think before you spend?
• Are you willing to make changes in your spending habits?
• What can you do to decrease your spending or increase your income?

Some people prefer to change their lifestyle and spend less. Others would prefer to find a part-time job until their credit cards are paid down. If you’re serious about reducing your credit card debt, you’ll need to set priorities and make changes.