Budgeting Basics

Remember all that basic math they tried to teach you in school? Well, personal budgeting is one of several practical, real-life uses for those skills. Because unless you're Bill Gates, Donald Trump or some other multi-million or billionaire, you're going to need to pay attention to how much you makes versus how much you owe. And even if you are in a fairly comfortable financial position where you can afford to hire an accountant, it is still a good idea to keep track of those numbers on your own as well.

The first step is so simple that it's easy to ignore - get out a blank piece of paper, a pen or pencil and a copy of your paycheck. Next, write at the top of the page how much your take-home pay comes to. Why bother, you might ask. You already know how much you get each month, so why write it down? Because without it the remaining steps are rather pointless. And you do want to figure out why there's no money at the end of the month, right?

Now get out all of your billing statements for the month. Mortgage or rent, car payment and auto insurance, electricity, gas both home heating and for the car's tank, water bill, etc. All the important stuff. These go at the top of the list. Without them you're homeless or nearly as bad off, so make sure they get taken care of first. Now deduct all these costs from the net paycheck amount. Sounds simple and I'm sure you may do this in your head each month, but trust me when I say that writing it all down will give you an even clearer idea of where it all goes. And this is only the first chunk.

Next, if you have any credit cards, get those statements out. These are going to be the worst offenders of your frittering' budget. Hold onto those for a moment because although they may be big dogs taking a huge bite from your budget, they are only the beginning.