- SET A GOAL: It is extremely important to know why you have decided to make a budget. To be financially responsible, Moni duh That's a given. However, having concrete goals can motivate you to keep saving when the going gets tough. Do you have debt that you wish to eliminate as soon as possible? How about that gorgeous red car that you have been lusting over for a while? Think about it.
- WRITE DOWN DAILY SPENDING: Now, I want you to grab a notebook/paper, and jot down the things that you buy throughout the day. This will help you know where your money is going. Include ANYTHING you buy. Yes, even that chocolate bar you grabbed from the gas station. Little things add up. Doing this will allow you to stop or cut down the little expenses that add up to big money drains at the end of each month.
- IDENTIFY REGULAR EXPENDITURES: Now, go back and look at your notes. Identify the things that you buy religiously, such as that coffee from Starbucks before work. Do the math. How much is this coffee costing you? Are you really willing to spend $1500 a year? That's the cost of the plasma t.v. you always wanted!
- COMPARE YOUR INCOME TO YOUR SPENDING: There are many other living expenses that you have to consider, before doing this step. Do you pay rent? How much do your monthly utilities cost? How about insurance? Food? After you pay all of this, how much money do you have left? Do you spend more than what you actually have? These steps will help you figure it out.
- IGNORE THE GREEN-EYED MONSTER! That's right. Forget about him. The grass is always greener on the other side. Don't buy a $70,000 car, if you can't afford it. There are more important things to spend your money on than just to show off. Save your money. Take that family vacation that will create memories forever. Live your life, not your neighbor's.
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