Congratulations I appreciate your credit worthiness, but going into negative balance is also quite easy. You may be self disciplined. It doesnt mean that you need not make a budget. Preparing a budget makes you much more disciplined and spend consciously. So budgeting with saving helps avoid going into negative balance or overdraft. Budgeting is not frugal living and foregoing all pleasures like a movie a month and an eat out once a week, but it just not allowing your earnings to be not overtaken by your expense. Everyone is planning to save, planning to invest, but do we have a well thought out plan for spending. A smart spending plan only can lead you to save more. There is no need to feel deprived with budgeting; it just means saving a percentage of your income spent unnecessarily to have a secured future. This need not be a stable attitude in human nature, with you wanting to take advantage of certain financial trends in the market like buying house or land at cheaper rates, or investing at higher rates towards building a bigger retirement corpus.

You have to really work on cutting how much you spend every month. Paying off your debt means cutting your spending immediately. Cut off as many of the things you can do without as possible. You can get more detailed help on budgeting to help you. Now you’re saving more money and you have the cash to make this plan work. 1. Make a list of your debts in order of interest rate, from highest to lowest. 2. Subtract the minimum interest on all your loans from your savings. 3. Use the remaining money to pay a bit of the principal on each loan starting with those with the highest interest. For example if you pay $20 on a 12% interest $1000 loan, it will take you 67 months to finish paying with a total payment of $1,353.43. On the other hand if you pay $40 monthly on the same loan you will finish the payment in 27 months paying a total of $1,103.28. This gives you a savings of $250.15 and 40 months debt free. Paying more is therefore saving more. You have to stay motivated to make this plan work. It is easy to decide to start, but it is hard to keep doing it on a long-term basis. Set goals and reward yourself each time you achieve a certain amount of debt reduction.

Are you seriously considering college, or are you now attending a college to pursue a professional career? If so, you are making a very adult transition toward your own unique future path. One of the key factors to the success of this (or any) endeavor is how you will best manage your money to meet that future. Budgeting is the discipline of acting responsibly and thinking ahead with your money. All college and would be college students should use a budget to manage their lives financially. Though you can/should start even if you are already well into your college career, it’s best to start much earlier and progress through three phases; junior/senior years of high school, freshman/sophomore years of college and junior/senior years of college. If still in high school, start earning and setting aside money for college right now. It’s never to early to start learning that college costs money and that you, the student, is ultimately responsible for paying for college.

If you don’t plan for these things, when they inevitably come up, you can easily get discouraged and abandon your budget. Often this causes people to live off of credit. This is a fatal mistake in wealth building and a topic that I will cover in a later segment. Another thing to consider in your planning is what you are going to allow for discretionary spending. This is another landmine that chips away at wealth if left unchecked. It’s extremely easy to spend money on lunch, coffee, and all those little expenses that don’t seem to be that much, but can add up to a huge chuck of your net income if you don’t plan them well. I recommend setting a weekly “allowance” for yourself and factoring that into your budget. There may be weeks that you exceed that allowance, but at least you make a conscious decision to do so and it triggers something in your mind that you’re spending more than planned this week. That may make the difference between whether you get a large latte or a small. These things may seem minuscule, but over time they can make a staggering difference! Assignment: Think about your spending habits. Do you truly plan your spending or do you just spend what you have until the money’s gone then wait for the next paycheck or do you actually have a written out budget? If you don’t have a written out budget, no worries! We’ll take a look at creating a budget in the next segment. Please join me for that.

Welcome to the world of “Budgeting”; a very important, yet widely neglected and misunderstood topic, in most households. I am involved in several home-based businesses, but the most important of these by far, is managing my Monthly Household Budget. Notice that I used the word “business” to describe managing my budget. Unlike most people, I treat my monthly expenditures as a business-always looking to improve the services that I pay for by finding better deals, and reducing resultant costs. I always aim to get the best bang for my buck through increased services at cheaper costs. When I find a particular budget item that can save me $100 per month, I do not only look at this as a savings, but I treat it as if I just received a $100 per month raise, which translates into a $1,200 per year salary increase (assuming that it is recurring monthly). Yes, by being diligent and resourceful, I just gave myself a $1,200 raise for the year, which, by the way, is cumulative in effect, year-over-year. Wow! Now imagine if I can replicate this feat for multiple items in my budget, again and again.

Create a budget that is realistic for the number and ages of your children and include clothes, items on their supply lists and even those extra costs that schools seem to write home about in the first weeks of school. 50% is for necessary expense – this includes your home bills such as a mortgage, groceries, utilities and any tuition you pay today. 30% is for personal expense – this is where your back to school budget should be placed such as notebooks, calculators and new school clothes. 20% is for personal investment – this should include saving for college tuition, retirement and maybe the short-term savings for that new computer someone will need next year. Back-to-school shopping is also a great way to teach children about handling money and how important it is to stay inside the family budget. Plan a family meeting to share this year’s budget allocation and discuss what items should be included.