Six Simple Tips to Help You Create a Budget

Did you start January with a fresh set of resolutions and the resolve to keep them this year? Perhaps one of those goals was to take steps to get financially fit and finally create that budget you've put off for years. But let's face it, for most of us the idea of spending an evening to create such a plan is about as appealing as a root canal. But it doesn't have to be! Here are six simple tips to help you put a big checkmark next to that budget goal.

1. Define your finance goals
   A way to make any plan work is to identify a goal you want to achieve. Take a few minutes to think about what you want to do with your money. It could be to pay down your debts, or save money for a house, retirement or a college education for your kids.
2. Add up your monthly income
   First list of all your sources of income. Think beyond just your salary and include items like bonuses, investment dividends, child support, rental property income or annuities.
3. Subtract your monthly expenses
   List every bill you pay monthly. Start with your housing, utilities, food, insurance, loans, car and credit card payments. Don’t forget about Fido’s monthly feed and grooming expenses. Check through this list to see if there are opportunities to reduce costs. A refinance of your mortgage or auto loan could save over a $100 each month. A consolidation of your credit card bills to one card with a balance transfer offer also provides savings. Stash the money you save into a savings or retirement account to help you move towards your financial goal.
4. Analyze your discretionary spending
   Now it’s time to analyze what you are doing with the money left over after you have deducted your expenses. An easy way to accomplish this is to look at each charge on your monthly or annual credit card statement. Most financial institutions break the expenses down into separate categories which help you see where you are spending your money. Look for any area you can reduce or eliminate completely and add that money to your financial goal account.
5. Set up automated savings
   Decide on a set amount to save each month. Then set up an automatic transfer from your paycheck directly to a savings or retirement account.