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Don't let your money manage you

Author: Annie Foy
Published: May 9 2012

When creating a budget to live by, you are making a good start at managing your money. When your money manages you, you are living paycheck to paycheck and still don't have enough to get by due to the fact that you haven't given a purpose to your money. Following are some tips to help you to better manage what you have:

The Budget 2-Step

First step with respect to your budget is making a realistic one. Make sure that you include each and every expense you incur or think you may incur. Once you have done that, total up your expenses and then subtract from your income. That dollar amount that you come up with will then determine what adjustments you need to make. If you have a negative number, meaning that you don't have enough income to cover your expenses, you better decrease any and all expenses you can until you at least break even. If you have a positive number, or more income than expenses, you better figure out where that extra money is going. Name each penny!

The second step is to stick to the budget. It is easy to create a beautiful budget that accounts for every dollar you will own, but it is worthless without following through with what you have set out. This process will be easier if you implement some tools in order to help you. One great tool for those who have smartphones is to download a checkbook app so that you can instantly enter what money you spend. This app works like a checkbook register, but you don't have to carry something extra around. Another tool will be to get a spreadsheet that works for you. If you are proficient with Excel, or other programs like it, you can create your own. If you need a little help, there are pre created budget spreadsheets you can download, just need to find the one that works for you. Make sure that you are updating your budget daily until living by your budget becomes a way of life.

Credit Cards

Do on use your credit cards. In most cases, you are using your credit card for wants and desires that you can't afford to pay for at the moment you want to purchase them. One way to ensure that you are a slave to your money is to continually buy things you can’t afford. If you find yourself in a financial emergency (refrigerator goes out, car breaks down, a medical emergency …), then use the card. If you must use your card, make sure that you go one step further and adjust your budget to reflect this increase in financial responsibility.

Emergency Fund

Having an emergency fund will help you when you encounter a financial emergency. With an emergency fund, you will not be as stressed when an urgent situation arises. Start your emergency fund with a minimal amount. A good benchmark is to have enough to cover your medical, auto, or homeowner’s insurance deductible, whichever is most. Once you have that covered, continue to grow your fund until you get at least three months of living expenses set aside. If you are having difficulty starting your emergency fund, although incurring another debt, you could get a payday advance loan to get a jumpstart.

Making sure that you know where each penny is going will help to ensure that you are taking the front seat when it comes to your money. Take the necessary steps to get a hold on what you make so you can make the most of it. A little diligence and hard work will get you to where you want to be.

Guest author Annie Foy is a freelance blogger and is writing on behalf of

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