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Creating a New Year Budget

If 2015 was a bad year for you financially, it may be time to consider sitting down and making a new budget for 2016.  A budget can help you stay on track with your spending, reach financial goals and create a safety fund that will help you through difficult financial times.

The Basics of a Budget

Many people simply do not understand how to create a working budget or how to use one.   With just a little practice, however, you can become a budget expert!  Many financial advisors say that they would never advise clients to be without a budget, no matter how much they make or how small their expenses.  A budget is the blueprint to financial success. In order to create a budget, it is often helpful to track your spending for a period of time.  A month is ideal, but even a week will give you a good picture of your current spending.  Do not try to control your spending; simply note how much you spend each day for various things. Once you have this data, you can begin to craft your budget.  Write down the amount of income you have from all sources, including your job, child support or alimony, dividends and all other income streams.  Note this on one side of a sheet of paper; it is the amount that you have to spend monthly on bills and expenses. Next, on the other side of the paper, list all of your monthly expenditures.  Use the information you collected to determine how much you are spending on food, gas, groceries and other items, and list all of your monthly bills.

Make A Plan

Now, compare the two numbers.  If your outgo is far more than your income, you may have to address certain spending issues.  While you cannot stop paying your bills without consequences, you may be able to control spending on luxury items or non-necessities.  Are you buying coffee every morning?  Consider purchasing an insulated mug and taking your own from home.  Could you pack a lunch each day instead of buying it?  Could you trim your grocery bill with coupons or other offers? If you are truly spending far more than you make, even after economizing, you may have to find a second job or reduce your debt.  You may want to find a cheaper place to live, get rid of a second vehicle or make some other major changes. If you are struggling to pay your bills, bankruptcy may be an option.  Call the bankruptcy attorneys at Oswalt Law Group in Phoenix today to learn more.

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