Money Management 101:How To Create a Plausible Monthly Budget

If you live paycheck to paycheck, like millions upon millions of Americans do, you know how important it is to be able to pay bills on time and not have to worry about day to day necessities. The amount of stress that constant financial hardship can put on an individual is simply unbearable. Pay the electric bill, or feed the family? Pay the minimum on the credit card, or run the risk of having the natural gas shut off due to non-payment? Many people ask themselves questions like this every day. They make painstaking decisions to, theoretically speaking, 'rob Peter to pay Paul' due to poor money management skills. The good news is that this cycle can come to an end with minimal effort.

The answer lies in a simple equation that is unique to each household. It involves only basic math skills, and is really quite simple to accomplish. By creating and sticking to a monthly budget, you can free yourself of many stresses you may encounter on a monthly basis- when the rent, mortgage or car payment is due, when it's time to pay the credit card and utility bills, and when you find yourself needing to head to the supermarket or department store for household goods. When you plan your finances ahead of time, you will find that this seemingly endless weight on your shoulders will disappear into thin air.

Leigh*, a twenty-something single mother from Cleveland, Ohio, knows all too well what it is like to not have enough money for basic living expenses due to poorly managed income. With her meager weekly paychecks, she found herself constantly struggling to make ends meet. "Last Christmas, I had to sell my computer and living room furniture to keep the heat on and buy gifts for my kids," she said. "It didn't hit me how bad things were until I walked in the door after work one day and looked into my empty living room. I broke down in tears when my three-year-old asked me where the sofa was."