Tell me the truth.  What did you think the ‘B’ word was? I’m going to bet you came up with the word for a female dog, right?  Well, for our purposes, the ‘B’ word is Budget! It may not offend people but it certainly does strike fear in the heart.  It’s too bad really.  A budget isn’t a document that guarantees you will never, ever again have a good time because you are now living like Scrooge himself.  It does mean that you can have the best that life offers but in a timely, sensible fashion that will not cause your credit card bills to soar or your FICO score to plummet. Never looked at it that way, did you?

In ‘One Year to an Organized Financial Life’ I go into the mechanics of creating a budget in great detail.  It’s the basis of your blossoming financial acumen.  How are you going to buy a house, make investments or save for a rainy day if you only have a ‘good idea’ what’s happening in your financial world each month? Let’s take a look at the simple basics. 

• At the top of a page or preferably in Excel, write down the amount of money you take home each month.  If you freelance, take a look at your income for the past two or three months and note the average.
• Now make a list of all of your expenses.  You’ll remember most of them but use your check register to jog your memory: rent/mortgage; utilities; phones; medical insurance; automobile expense (repairs, insurance and payment) and homeowners insurance pop into my mind immediately.  What items are on your list?
• What about those items that come along periodically? Dues to professional organizations, safe deposit box rental and school tuition come to mind.  What expenses do you have that need to be addressed once or twice a year? 
• The big culprits in the Money Drunk syndrome are the unconscious cash expenses we make.  We don’t usually bother with receipts for these items because we think Uncle Sam doesn’t care about my latte consumption or how many home or fashion magazines I read.  But you need to care!  Get receipts for everything you buy for a week and multiply by 4 to see where your cash is going in a typical month. Do you take the receipts for cash withdrawals from your bank or ATM and note them in your check register?  If not, this is another way you are feeding your cash spending frenzy. Give yourself a weekly allowance.  Yes, just like your kids get!

When you add up your expenses you may find you aren’t making enough money.  Your next task is to go back over your expenses with a fine tooth comb and see where/how you can save.  Here are three common areas: 

• Do you need all of the perks you pay for on your cable or phone bill? If you pay for premium channels and watch only basic cable, you can instantly (and painlessly) start to save each month. 
• Take a second look at your phone bill.  Or should I say ‘bills?’  Most families have a phone/computer line; a cell phone for every member of the household and in many cases a dedicated landline. See if you can cut some of these out or negotiate for a better package.  Do you use for example several different providers?  What about pre-paid cell phones? Call your providers once a year and ask if they have any ‘special’s they can share with you as a long time customer. 
• Can you safely have a higher deductible on your automobile, home or medical insurance policy?  Again you’ll have an instant saving in your premium. Can you be even more drastic and sell you car?  If you live in a big city with mass transit would that be a viable solution for you?

If you are one of the lucky people who come up with a surplus each month, start saving for a 3 to 6 month fund that will cover you and your family in the event of an emergency. If you already have that in place, while you march to the head of the class, you can decide if you’d like to start an investment portfolio or save for a big-ticket item like a new home or car. 

Your budget isn’t static.  As your life, income and goals change, you need to tweak it. It’s got to be as alive and vibrant as you are.  It’s a companion on your financial journey.  Otherwise it’s just a boring homework assignment you did one afternoon.  You don’t know where it is nor do you follow it. But then, who cares? You’re off for another latte and, like Scarlet O’Hara, you’ll think about that tomorrow. Or will you take the reins and think about it today!

For detailed instructions on how to organize your closet, pick up a copy of my New York Times best seller, One Year to an Organized Life. Looking for a specific type of tip for future newsletters?  Send your ideas, comments or queries to me from my website: www.reginaleeds.com. 

Regina Leeds
'The Zen Organizer'
www.reginaleeds.com
www.oneyeartoanorganizedlife.blogspot.com
Find me at Facebook and Twitter!

Professional organizer since 1988.
Author of 7 books including New York Times best seller
"One Year to an Organized Life."

Organizer/Author/Speaker