Expenses, Expenses ... Is Creating a Personal Budget Even Possible?

Does everything seem so expensive that you feel like your financial condition is spinning out of control?  So much so that whenever you get ahead, it seems like something comes up, such as a car breakdown, as soon as you seem to be getting ahead?  When it comes to our constant bills such as utilities and health insurance, our rising debt from credit cards and mortgages, and the many daily expenses we're assaulted with each day, creating a personal budget can seem futile.  Yet, having a personal budget is probably the only way to get ahead and stay afloat.

When creating a personal budget, write down your income.  Then, figure out your 'must pay' expenses.  This includes the car payment, insurance, mortgage or rent, utilities, etc.  I usually budget a little bit high for each expense so that there's something leftover at the end of the month or so that I have a bit extra incase of an emergency.  For example, I generally budget $300 for my electric bill when creating a personal budget for each month.  During the winter months, this is pretty much on target, but during the summers, my electric bill is around $100 a month.  In the months that I have $200 "extra" left in my budget, I use that $200 to pay extra on my credit cards or to put into savings.  Sometimes, I use it for personal fun or gifts.

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If you require assistance creating a personal budget, there are all kinds of spreadsheet programs and budgeting programs available, including the free software available from this web page.

It is relatively easy to create a personal budget that enables your family to pay the monthly bills, purchase weekly groceries and have a little left over for savings. It's always prudent to begin a savings account and start early on. In the near future you'll be very glad you took this advice.  If at all possible, save 10% of your income every month.  Even if you can't save 10%, put in whatever you can because every little bit counts and adds up.  To see what I mean, play around by putting different numbers into a savings calculator and you'll be amazed at how much money you can accumulate in 5-15 years with a steady monthly contribution and compounded interest rates. 

Creating a personal budget is one thing, but sticking to it is another.  Sometimes it helps to envision what you want to accomplish; the envision the reward.  For example, you might discover that in five years, you'll have saved over $60,000 by contributing $1,000 to a savings account.  By constantly reminding yourself of the benefit that you will receive in five years, it will be easier to stick to your personal budget because there will be a tangible reward.

Start creating a personal budget now and more important, stick with the budget that you have created!

"Expenses, Expenses ... Is Creating a Personal Budget Even Possible?" contributed by Edward Porter