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Budgeting Tips to Get Your Finances on Track

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Do you cringe when you hear the word budgeting? If so, you aren't alone. Creating a budget requires planning and a lot of work to record all financial transactions made in a household. It's even more work to keep your spending within the limits of your monthly income.

Some people find it difficult to remember to record each and every item purchased, while others are surprised when they see how much money they spend on small things like daily coffee. If you don't use some form of a budget, however, you run the risk of continually spending more money than you bring home or spending more money than you realize on things you don't need. You could also be at risk for missing payments on credit accounts, which may have a damaging effect on your credit history score. No matter which financial life-stage your family is in, it's never too late to create a household budget.


Recording how much of your monthly income goes to pay various bills and expenses will help you see where you may be spending more money than expected. Cutting unnecessary expenses frees up cash to increase emergency and long-term savings or pay down debt faster. Planning your monthly spending so it doesn't exceed your monthly income can prevent you from turning to credit cards or loans to cover your regular monthly bills. Sticking to a budget can also help families, who would otherwise scramble to find the cash, to make their monthly mortgage or loan payments on time.


Record your net monthly family income which is your total income from all sources less taxes, union dues and other deductions. Then, list each bill, loan and credit account payment, as well as variable expenses that change from month to month, such as grocery spending, entertainment and restaurant costs. Remember to include a monthly contribution to savings in your expenses. If your expenses are greater than your monthly income, you'll need to find ways to increase your income, decrease your expenses, or both.


Families can find it difficult to stick to budgets that don't include rewards for careful money management. When you set up your budget, include a monthly amount to fund inexpensive activities or outings, such as monthly movie and dinner nights, concerts or sporting events, or longer-term goals, such as annual family vacations.

Another common budget problem is forgetting to record daily spending. Small expenditures can add up over the month and are difficult to track down weeks after they've occurred. Avoid this problem by setting aside a monthly cash amount or allowance to family members to spend as they like.

Now that you know more about budgeting tips to get your finances back on track, get your credit report & score.



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