Complete Guide to Budgeting and Saving

Are you conscious of your financial situation? Do you have a job, yet at the end of the week you have no money, no savings?

You know you're financially unconscious when:

Make a Game Plan

To set your budget on track, ask yourself, “What are my basic needs versus the basic needs of my family?” How do you set family budgets and savings goals? Realize that goals and objectives are two different things. You set objectives to reach your goals.

An objective: I will put five dollars a week into my savings account.

The goal: to build a savings account worth $260 in twelve months.

Create goals and objectives that are specific, not general:

An objective: I will put money into my savings account every week.

The goal: to save some money for a rainy day.

Remember when you were a child, your parents set limits in order to teach you? Being specific sets limits, being general lets you out if you don't feel like following up on your objective. Make yourself accountable for your actions by being specific.

So define the needs of your family and the wants of your family. Needs keep families running smoothly: you have toilet paper, food, a roof over your head. Wants are the transient things that make a person happy: I want Chinese take out tonight. I want that new DVD. I want to go on a cruise with my friends. Make your game plan, set realistic objectives to meet your goals. Create short-term, intermediate and long-term goals and create objectives to reach them. Then create your budget so you can achieve your goals.

Creating a Budget

Budgets are basic math with a lot of organization. Create your categories, define the monthly budget amount, record the actual amount for the category and subtract the actual from the budget to find out if you are behind or not. Pretty much all budget templates use the following categories. Adjust your categories to fit your situation.

Your income categories should look like this:

This will give you your INCOME SUBTOTAL.

Expenses should look something like this:

These will give you your EXPENSES SUBTOTAL.

If you have a bimonthly expense, divide by two for the monthly total; semi annual expenses, divide by six and annual expenses by twelve.

That's a heck of a lot of expenses, isn't it? Those are basic to most households. The income category is tiny in comparison, right? Tally up the income subtotal and the expense subtotal, then subtract the expenses from your income. If you've more income than expenses, you are in fighting shape. By the way, this is called your net income. If you have more expenses than income, readjust your budget and stick to it.

Strive for no more than 35 percent of your income to be allocated to mortgage and taxes or rent. Most families have one to two vehicles, so strive for no more than 20 percent of your budget for purchases, gas, maintenance and repair. The average family of four should strive for around 15 percent of the budget for food and toiletries. The remaining 30 percent of the budget is situational and should be budgeted according to family specific expenses.

The rule used to be to have two months of savings built up. Now it is six months minimum, a year or two better. Start small, get into the mindset of saving, take baby steps, then run with it.

The economy is terrible. But by assessing your needs and your wants, budgeting your money, spending smartly and putting money back into savings, you can work on offsetting the negative and get your family into a workable, positive routine of saving.

Spend Smartly

If you don't know the difference between a debit card and a credit card, find out. Ignorance is no defense to collection agencies. Ask questions, read the small print. A debit card takes the money straight from your checking or savings account. A credit card you pay a minimum monthly payment with interest. The person behind you in checkout won't know if you are using a debit or a credit card simply by looking at the sponsoring logo or bank name.

Tips for Saving

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