A personal budget, part of your New Years resolution?

It’s almost that time again. The time when millions of Americans make New Years resolutions. Unfortunately, most resolutions never get completed. From losing weight, working harder, going to the gym, eating healthier, being more environmentally conscious and managing your money. Everyone starts with good intentions, but keeping those resolutions is often a bigger task than expected. Most resolutions are things we really want to accomplish but sometimes our goals are somewhat unrealistic.

For those of you who plan to make the resolution this year to manage your money better, start with the most simple tool of personal money management, a budget. Start by making your budget realistic and simple. Creating realistic a realistic budget will help keep you motivated and accomplish your financial goals.

First, examine your current financial situation. Make a list of all your financial debts including credit cards, personal loans, medical bills, auto payments, mortgages, etc. Be sure to also include their balances, interest rates and minimum payments. Total up the balance and you might be amazed at just how much debt you have. Maybe this will be enough to make you realize how important it is to create a budget and stick to it.

Next, analyze your current income situation. How much cash does your total household bring in each month to spend on living expenses, bills and entertainment. You may realize here that you don’t have enough cash coming in to live the lifestyle you have.

The next part is going to take some effort. You need to analyze your spending for one month. Write down every penny you spend for one full month. This includes all your utility bills, entertainment, vending machine visits, bad habits, EVERYTHING.

After you have completed these steps you will have enough information to create a simple budget and spending plan. You need to divide all your spending into several different categories. There are many places to find sample budgets with specific examples of these categories. Distribute your household income into each of the categories. Start with all the mandatory expenses such as mortgage, car payments, groceries, gas, etc. Once you have these categories filled the remaining money should be divided into categories such as clothing, entertainment, eating out, etc.

Some of you may realize you have run out of money before you get to the enertainment and eating out categories. If this is the case you have the option of finding free entertainment, not eating our or getting a part time job to fund these categories.

Make your personal budget experience fun and easy. Don’t get frustrated if it doesn’t work the first month. Adjust categories to suite your needs and if necessary find other income sources. Don’t let this New Years resolution be one that is forgotten!