How to Prepare a Personal Budget

Now more than ever families have to prepare a budget to help them manage their monthly bills. From rent and mortgage payments to groceries and school trips, knowing where your money is going will help you stay on top of things. A bankruptcy law firm Colorado uses knows just how close many families are to losing everything and that keeping a tight budget can help you avoid bankruptcy. Here are some tips for managing your budget.

Three Steps
To start your budget you have to do three things:

  1. Look at the money coming in each month.
  2. Look at the money going out each month.
  3. Track your spending carefully each month.

Once you have discovered where your spending is going, you will be certain to find ways to save. Chances are you are spending way more on things such as restaurants, groceries and toiletries. Keeping track of these spending trends will allow you to figure out where you can save.

There are many very simple, very helpful software programs you can use to help you keep track of your budget. These programs allow you to enter in your income and your bills and will help balance your budget for you. You have to be diligent in entering money coming and going for it to be effective however.

Track Your ATM Transactions
It’s very easy to lose track of how much you are withdrawing from the ATM. Keep track of your withdrawals and where you spend the money. Keep receipts for all cash transactions so you can see where you are spending and make changes to help you save.

Try to Avoid Credit
If you know you are in a spending down ward spiral avoid using your credit cards until you can pay them down. Interest will kill you and you won’t even realize the harm it is causing to your budget until it’s too late. A cash only policy will help you stay in control of your spending.

Only Include Income You Have
Don’t count on things like income tax returns, a promised raise or the hopes of a bonus to help pay off bills. Count only money you have in your hands or in your bank account.

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