9 Tips to Getting Control of Your Finances

Many people are so intimidated by setting up a budget that they never do it. Setting up a budget is really an easy process. It can be done in nine easy steps.

1.  Organize Incoming Funds
The first step is to organize the money coming in. Many people work more than one job. They may work a full time job, but also do several side jobs. The first step in creating a budget is to get a handle on all the ways your family is bringing in money.

2.  Journal
For one month record every penny that you spend. If you spend it write it down in a book. Many people are amazed at the money they spend on incidentals each month, because it goes out a little at a time.

3.  Organize Outgoing Funds
While the second step may take some time, it is vital to the success of your budget. Now look at the list you created in the second step. Divide the list into categories. List these categories according to their importance.

4.  Control the Outgoing Funds
The fourth step is to determine your budget before the month starts. Look at your categories you have set in your organization step. What needs to be changed? Do you need to add savings for your kid’s education or your retirement? Now, determine how you will spend each penny of your earnings.

5.  Go Ahead and Pay Yourself First
The fifth step is to pay yourself first. Take the first ten percent and put it aside.  You work hard for your money and deserve to have some fun with it. Without rewarding yourself, you will not feel encouraged to keep working. Take that money off the top so that you be encouraged to stick with the program.

6.  Giving Money
The sixth step is to give away some money. Give away ten percent of your money. Decide what church or charities deserve your money and give away ten percent. If you are not use to doing this, it may bother you a little to begin with, but you will be amazed at how good you feel. It will also encourage you to work even harder.

7.  Save Money
The next category you should include is savings. Put ten percent of your income into a savings account Many people ask how much savings is enough. You should have a minimum of six months of expenses in a savings account.

8.  Mortgage or Rent
Your mortgage or rent should be the third thing you pay. It should not exceed 33 percent of your income. If it does, you may need to consider moving. In the first three steps, you have spent 63 percent of your income.

9.  Remainder of the Outgoing Funds
The remaining categories are very personal. Look at where you are spending your money now. Take steps to control how much money is going into each of the remaining categories.

Many people find it hard to set up a budget. The hard part is to make it personal. Make sure and reward yourself first. Then, give some money away. Next, save ten percent of your money. Stretch the remainder of your money to cover your bills by using great coupons. Never pay full price for anything.

(Jemma Ryan wrote this article – she loves blogging about her pets, cooking & improving her credit score.)