Ahh, the dreaded B-word.

Creating a budget really isn’t that hard, sticking to it is a different story.

The basics of the budget is to calculate your monthly take-home income. From that total, your first priorities are rent/mortgage payment, food, utilities and insurance. After those are satisfied, use the up the rest of your cash-inflow to assign to your debts, making sure every dollar is accounted for. If you need to give yourself a category for “spending money,” do so…everyone is human.

The key to making your budget work is sticking to it. Prior to every month, you should have this set up, and know where every dollar is going. If you can’t commit to sticking to a budget you set up, then you might want to analyze your spending habits. Keep a journal for the next month documenting every dollar you spend and find your money blackholes.

If you’ve created you budget, covering your necessities and the minimum payments for you debts and you find “too much month” and “not enough money,” you will need to start looking to trim the fat even further. The bad news is that you have a debt problem. The good news is that creating a budget gives you first the step to getting rid of that problem. I’ll explain more on dealing with this situation in coming entries.