Financial Budgeting Advice

Eliminate wasteful expenses before creating your new budget.
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You and your significant other should sit down and work on your budget together. Budgeting is one endeavor that requires compromising, which may help prevent your first fight as a couple. Pull out both of your latest pay stubs. Calculate how much you both net each month after taxes. Determine how much money you want to have left over each month for savings, trips or investments. Get a grip on your expenses and enjoy your new life together.

Eliminate Wasteful Expenses

Start figuring your budget by first discussing wasteful expenses. Everybody wastes money whether they realize it or not. Cut back on some of those after-work drinks, or pack your lunch for work instead of eating out every day. Keep that ATM card in your wallet and only use it when necessary. There is nothing more wasteful than having a load of 20-dollar bills in your wallet. The extra cash will prompt you to spend every time you get an impulse to buy.

Cut Variable Expenses

Your monthly bills will either be fixed or variable expenses. Fixed expenses stay the same each month, for the most part; variable expenses do not. Fixed expenses include your mortgage, car payment, car insurance and home equity loan payments, according to Kiplinger's budget worksheet. Variable expenses include your electric and water bill, gasoline for your car, entertainment, groceries, and medical and dental expenses. Variable expenses are the ones you need to target when developing your budget. Start with entertainment and groceries. Use more coupons when grocery shopping, or start buying more store brands. As for utility bills, keep your thermostat at 68 degrees in the winter.

Use Budget Tools

There are numerous budget tools available which can help you with your financial budgeting. A budget calculator (see Resources) usually bases its figures on typical household income-to-expenditure ratios. Hence, using a budget calculator can help you better budget expenses that are higher than average. Start plugging your income and expenses into the available boxes. You may discover, for example, that you spend 15 percent of your income on groceries when 10 percent is more reasonable. Budget software available from other companies (see Resources) can help your project and adjust monthly expenses.

Live Within Your Means

Live within your means once you establish a household budget. Avoid buying the latest riding mower on the market if yours does the job. Keep your ego and impulsiveness in check when Mr. Jones across the street pulls his new Corvette into the driveway. Discuss major purchases with your spouse or significant other. Plan ahead for major purchases when you do need them. For example, decide how much extra you will need for your summer vacation. Cut back $10 per month on entertainment expenses. Look for a fixed expense that is close to being paid off, then allocate the extra money toward your trip.

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