Money management or budgeting is the process of coordinating income and expenses. We need to balance the amount of money we make with the amount of money we spend. Good money management can occur only with a written plan or budget.

STEP ONE - HOW MUCH MONEY DO I HAVE TO SPEND?

Determine your guaranteed income for a month. Count only what you know you will receive - if you might have overtime but are unsure, do not include this in your budget.

STEP TWO - BUILDING A BUDGET

List your mandated bills - bills that must be paid each month (rent, utilities, car payment, etc.)

List your variable bills - bills for which total due may vary from week to week and costs that could be reduced if necessary ( food, telephone, entertainment). To figure out a reasonable amount to budget for a given bill, average the amount you paid in the last six payments.

STEP THREE - FIND HIDDEN COSTS AND WASTED SPENDING

• For one month keep the receipts for EVERY purchase you make.

• Carry a notepad with you so if you do not get a receipt, you can write one. (EX: when you purchase a soda from a vending machine). Did you remember the parking meter money, the tip for the waitress, the stamps you bought, the $.50 you lent Bob, etc? Nickels and dimes add up over a months time; make sure you list EVERYTHING you spend.

• At the end of the month, list your purchases and total the cost. SURPRISE!!!!

STEP FOUR - BALANCING THE BUDGET

If your budget does not balance, you have two choices - 1)increase your income or 2) decrease your expenses (Refer to step three.)

• Determine what expenses are not needed. Eliminate them.
• Determine what expenses can be reduced. See Tips on Budgeting.
• Start a savings account for emergency expenses
• Where are you wasting money????? STOP DOING IT !!!!!!!