Budget Tips

You don’t have to be a brain surgeon to know that you’re likely not saving enough of what you earn to pay your bills should you lose your job or suffer a financial calamity. Many financial advisors suggest you keep at least three months of living expenses banked for just such an emergency. Six months of living expenses socked away is better.

Let’s get real. Most of us won’t or can’t discipline ourselves to save such an amount. Here’s why. Most of us don’t even have a written budget. So, the first step is to work up a realistic budget that includes all elements of your total living expenses.
   
 Which might include:

•    House payment or rent
•    Total utilities (water, electricity, natural gas)
•    Phone, cable TV, Internet
•    Transportation (car payment, car maintenance, public transportation, parking, toll fees, gasoline)
•    Food (groceries and meals out)
•    Insurance (life, health, cars)
•    Clothing (new purchases, cleaning)
•    Home maintenance allowance for repairs, lawn care
•    Retirement contributions (401k, etc.)
•    Personal care (haircuts, skin care, cosmetics, etc.)
•    Medical co-pay projections (doctor, eye care, dental)
•    Child care
•    School lunches for your children
•    Professional dues
•    Holiday gifts
•    Subscriptions
•    School loans
•    Revolving credit payments
•    Miscellaneous: Movie rentals, coffee, snacks, drinks with friends after work, etc.

The point of this exercise is that many of us are clueless as to where our money goes. One day we have money in our account—the next week, we’re running short of cash. Where did it all go?

The key to successful financial planning starts at home. Once you have the hard facts in front of you, perhaps you can find ways to cut corners and begin to pay yourself.

Only then will you begin to understand your ability to begin saving for your future.