Money Management Tips

Budgeting and Saving for the Future

Setting Goals.....

>> Long Term Goals

Long term goals provide a clear reason for why you are saving. It is important to know your reasons for saving. These goals may be different for everyone. It is important that you have a real desire to reach your goals, so the more clear and concise your goals, the better. They may include:

    ° Children's college fund

    ° Getting out of debt

    ° Buying a new house

    ° Starting a new business

    ° Taking a dream vacation

    ° Achieving an early retirement

    ° Building wealth and financial freedom

It is extremely important to know why you are budgeting your money in order to stick to a saving plan. You need to know what you want in order to get what you want.

>> Short Term Goals

Setting short term goals is equally important for creating a successful money management program. Short term goals with rewards will ease the pain of a strict budgeting plan. Long term goals may seem daunting at times, so by having short range goals that lead to your long term goals, you will have sooner gratification and excitement.

Having rewards for the accomplishment of your short term goals adds a nice incentive, and will really help keep you strictly to your plan.

    ° Goal: Save $200 dollars a month.
Reward: Go out to your favorite restaurant.

    ° Goal: Stick to your budget for two months.
Reward: Buy yourself a gift.

    ° Goal: Pay off a credit card.
Reward: Take a weekend trip to celebrate.

Setting small goals with rewards will keep you motivated and will make budgeting much more enjoyable. This is a necessity if you plan on sticking to your program faithfully. Plus by having rewards you are less likely to splurge randomly, thus negating the good that you have been building up.

Create a System.....

>>> Four Categories to Create

    ° Income- You need to clearly know exactly how much money you have coming in on a monthly basis. This needs to include all of the money that you receive on a regular basis. Monthly income, part time income, bonuses (divided by 12 to get a monthly figure), and any supplemental income you may receive.

    ° Expenses- Clearly define your monthly expenses. This must include all expenses, fixed and variable. Fixed expenses are those incurred on a regular basis such as mortgage (rent), monthly bills, and any other regular expense. Variable expenses are those that fluctuate from month to month. Some examples are holiday shopping, shopping for clothes, entertainment, and unexpected cost (doctor visits and car maintenance).

    ° Savings- This should be a fixed amount. The actual amount should be based on the difference between your income and expenses. For some this may be $50 per month, and others may save $500.

    ° Personal Allowance- It is important to set aside a personal allowance for yourself. It is also important to establish an allowance for your children if you have any. This is necessary to budget and save successfully. If your plan is too strict, you are more likely to break it. By allowing a reasonable allowance, you will be much less likely to dip into your savings.

>>> Look for Trouble Spots

If your expenses are higher than your income, then you may need to "trim some fat." Once you start keeping track of your expenses, you may be surprised (unpleasantly) at the amount of money that you "waste" on very non-essential spending habits.

Here are some common places that some money can be saved.....

    ° Eat more meals at home

    ° Beware of impulse buys

    ° Cheaper forms of entertainment

    ° Unused magazine subscriptions

    ° Never shop without a list

    ° Unused gym memberships

Most of these "problem" areas can be modified without much heartache. Remember your goals and reasons for saving, and keep focused on those.

More money management tips... check out these 21 money savers!

Keeping Track.....

>>> Final Tips

    ° Be consistent

    ° Make it a habit

    ° Keep a written record

    ° Budget for the unexpected

    ° Review budget every six months

    ° Make your goals realistic

    ° Keep focused on your financial goals

Being consistent is the key to utilizing these money management tips for long term positive results. Make a commitment to get in control and stay in control over your financial situation.

A Final Thought!