The importance of creating a personal financial budget

As the old saying goes: “Knowledge is power!” Keeping track of how you spend your money is the first step toward getting control of your finances. A financial budget allows you to compare your expenses to your income. If your expenses exceed your income, a financial budget helps you pinpoint which expenses are higher than you would like, and where you can find ways to save.

That’s powerful information because it gives you the ability to make informed decisions. And creating a personal financial budget is easier to accomplish than you might think. Click on this link for a sample financial budget worksheet. Print it out and fill in the blanks that apply to you.
Paying Down Debt
As a rule, you should pay down debt with the highest interest rates first. For most people, credit cards carry the highest interest rates of all of their outstanding debt. Focus on paying down your highest interest credit cards first. At the very least, try to make more than the minimum payments required.
Setting Goals for Saving

Once you’ve identified how you’re spending your money, you can start to develop a goal for how much you’d like to spend every month, and how much you’d like to save.

Having savings gives you tremendous financial flexibility and freedom. It gives you an emergency fund for any unexpected expenses or loss of income and it’s the first step toward owning your own home, or paying for college or retirement.

Decide how much you’d like to save each month. Whether it’s $50 or 10% of your income. It may not seem like a lot at first. But if you get into the habit of saving every month, it’ll really start to add up!
Download a FREE Financial Budget Worksheet
Click here (requires Microsoft Excel)
 
Disclaimer: The content of this web page is for informational purposes only and is not intended to constitute legal or financial advice.