How to Create and Stay on a Budget

In these tough times, Americans may have difficulty with their money. With the economy today, you may be looking to spend less, save more, or both. Learning to create and maintain a budget is necessary for healthy living.

First, you must calculate your income. You need to know how much money you have to work with. It is best to calculate your monthly income, as most bills are due monthly. Now you must decide on what you need. Things like rent or mortgage and car payments must be earmarked first. They are the larger chunks of your paycheck and can hurt you if you let them slip. Next, include other bills such as utilities and insurance payments. All of these are set, reoccurring, monthly payments that you know will be the same every month.

Building in savings is a big part of creating a budget. There will be a time where you need money if you loose your income or for an emergency. Saving 10% of every paycheck is a good rule of thumb. If you find that you can't save 10%, don't worry. Any amount of saving is good, provided you stick with it! This money can not be touched for any reason other than in an emergency! It also creates a sense of security, knowing that you have something to fall back to on a rainy day.

Now this is the tricky part and may take some time to figure out. You must now find how much you can spend on food, clothing, and entertainment, as well as upkeep costs for the home and vehicle. Keep track of how much you spend at the grocery store and when you eat out. You may need to cut back on some things. Do you own a used car? Parts may need to be replaced soon. The home needs to be taken care of also. Something could just as easily go wrong in the home. Saving for this and knowing that maintenance will be needed is necessary. Once you find out how much you need, try and stick to it. If you accumulate a decent amount of money, a good idea is to find a credible bank and deposit your money in a CD (Certificate of Deposit). These CDs give you a percentage on your deposit, but you can not withdraw until the CD matures. For more information on what a CD is, click HERE.

A good budget is a budget that works. If you try to set goals that you can't reach, then you will not be able to keep on budget. The key to a budget is saving. If you can save money and still live comfortably, you have a sturdy, working budget.