Stop Leaking Cash (page 2 of 3)

Get With the Budget

Every household should have a written budget. Some people have the feeling that if they balance their checkbook regularly, that should suffice. But focusing only on your checkbook is not a realistic, safe, or forward-thinking way to approach your financial well-being. It is also crucial to be honest about your budget, even when you overspend. Again all you need is a pad and pencil.

Total income. Add up all the money that you can expect to receive during the year:

Income		Amount
Regular paychecks and bonuses		$
Part-time or freelance income		$
Interest		$
Dividends		$
Other income		$
TOTAL		$

Fixed expenses. Next add up all the payments that you make a regular basis during the year:

Expenses		Amount
Mortgage payment or rent		$
Electricity, gas, and water		$
Telephone: Home and cell phone		$
Internet service		$
Garbage		$
Alarm service		$
Cable or satellite dish		$
Insurance		$
Debt payments		$
Commuting expenses		$
TOTAL		$

Variable expenses. Now add up all the payouts you make that vary more widely from month to month:

Expenses		Amount
Food and beverages		$
Paper goods		$
Car maintenance		$
Home maintenance and improvement		$
Furnishings and appliances		$
Clothing		$
Personal grooming		$
Recreation		$
Vacation		$
Gifts and contributions		$
Health care not covered by insurance		$
TOTAL		$

The moment of truth. Subtract all your annual expenditures from your total annual income. If the total expenditures are less than the total income, you are living within your income; if the expenditures are more than the income, you need to go through your variable flexible expenditures -- and some of your fixed expenditures as well -- and reduce your spending.

Total Annual Income		Annual Expenditures		Cash Flow
$		- $		= $

Savings and Spending
When you are working out your budget, keep in mind that the recommended savings rate is 10 percent of your take-home pay. If this isn't happening, you may be ill-prepared for retirement. Start by writing down everything you spend for about three months. This should give you a pretty good idea of how much you spend on food, gas, personal items, recreation, and all other variable expenditures. It's also a good idea to take out the past year of utility bills to get an idea of the seasonal rise and fall of expenditures there. Once you start seeing where your money is really going, you can look for ways to cut back and save more.

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• Get Out of Debt
• Getting out of debt is one of the most important positive steps you can make for yourself and your family. Make 2008 the year you finally clean up your finances.
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• Lose the Weight
• Maintaining a healthy weight is always important. Here are some easy changes you can make to your diet and fitness routine in 2008 to get back on the track to wellness.
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• Quit Bad Habits
• Bad habits are crutches that hold us back. Read the following articles to begin the process of moving forward with your life in 2008.
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• Organize Your Life
• Put everything in its place this year with these tips for maximizing space and cleanliness.
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• How to Make Time For Friends and Family
• Ideas on how to spend more quality time with your nearest and dearest.
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