Many People are finding themselves in Debt lately. With the economy like it is more and more people are struggling. A good way to prevent yourself from digging yourself further debt is to form a personal budget that can work for you and your family. Many people spend their hard earned money frivolously without having much regards to how much money they will have left before their next paycheck comes.  Which often leads, them to find they have little or no money left and ending up having to borrow from friends, family or even a lender just to pay essential bills or provide for their family. The problem with this type of spending is that you tend to incur debts that will begin to cause added problems with your finances that you become unable to pay off your debts when needed.

This is not the correct way of handling your finances. It just adds more debt that you don’t need.  By creating a personal budget you will begin to plan all of your financial aspects and prioritizing items. Eventually you will achieve a successful financial situation you will enjoy. The first thing you need to do is take a careful assessment of your needs on three different bases:

•             Short Term

•             Medium Term

•             Long Term

You will need to ask yourself a few questions, what are you objectives? What is it you would like to achieve over time? What are your targets for your budget? How soon do you want to pay these debts down?  Make a list of all of these things, and then you should begin to layout your financial means.

Itemize your income and your expenses monthly, then itemize the expensive starting with the most important ones, important expenses, and then least important. Find and implement a prioritizing formula that will work well for you and your situation. Assess your consumption costs monthly write your figures down. After you have done this, write down your sources of income and what each one brings in on a monthly basis. Place your expenses on the right and your income on the left hand side. Add each column up then subtract to find the difference. You will want to figure out rather you have a deficit or surplus.

You will Figure out what you can actually afford and amend the budget, once you have established a working budget that will help you and your family, print it out and stick to it. Sticking to the budget is perhaps the most important aspect of creating a personal budget.  It also can be one of the hardest things that you have to do. This takes discipline. If you fail to adhere to the budget, you will not have helped your financial situation by any means; it is likely you will only further your debt and make it harder in the long run.  Sometimes we have to get real with ourselves and ask do we really need this new item so bad. That money could be going on paying your debts down!  I admit I love shopping, I love to have the latest technology but I refuse to go in debt for it.  My Bills always come first. Then I put money aside in our emergency fund.  If you don’t have an emergency fund I urge you to start one! I know some will say they don’t have the extra money but if you just take 5-10 a week from your check and put it back you will never know it’s gone.  If you’re really hurting for money Start cutting stuff! You don’t have to have cable, or that extra data plan on your phone! Sometime you have to go down to the basics.  This will not last forever but in till you are comfortable and not worrying about what if’s then the best thing to do is save as much as you can!  Things come up and I hear people talking about they don’t know what they are going to do. I hurt for them because I know things are tough right now but I also question them in my head.  That’s why I am so hell bent on emergency funds! Example: You have to have a car right? You just noticed that you need new tires but you don’t have the money to replace them..or you need new breaks but you didn’t budget that in for this pay check. That’s when not only issues happen it also causes unneeded stress.

Tax time is coming and many people feel if they are getting a refund it’s time to splurge! Umm noooo this is not the time!  However, this is the perfect time to pay any debts that you owe off and then put enough back to cover things that may happened throughout the year.   I will admit I would love to take my refund and shop till I drop but I know that’s not a smart thing to do. I have to look ahead. We don’t know what this year is going to bring.  I know that I’d rather do without then struggle any day! I don’t need any added stress!  Many people are going to say but Jen you buy this and spend on this and that your right I do, however I make sure that any extra money I do spend its already been budgeted in. I am not saying you can’t buy stuff! I am saying make sure you have it in the budget! I would not take any money and buy something if I knew It was going to cut into our monthly bills or emergency funds.  This year I have had to budget more than before since income has been cut. I know firsthand how hard it is.  I also know it can be done with adjustments. Don’t look @ the moment look at the big picture! Things will get better but till then you are going to have to make changes.

Now Speak OUT! I want to hear how you stick to budget? Do you have an emergency fund? If not how do you handle life’s unexpected?