At the beginning of the year, you may have made a commitment to save; you don't have to wait to next year to know if you are successful. Your monthly budget is a roadmap to your financial success. As you travel down the road toward financial success, you need to invest a little time and effort to ensure that you are on the right track.
A monthly budget checkup is your safety net. It will help you avoid hazardous budgeting pitfalls and financial setbacks that are far too common with many budgeters.
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The 18-Step Monthly Budget Checkup
- Gather last month's receipts from your pockets and wallets
- Retrieve your credit card and bank account statements from the previous month
- Categorize and chart spending from previous month using the above statements and receipts
- Set up categories for spending areas such as housing, utilities, transportation costs, food (eating out and at home), debt payments, payments for gifts, entertainment, charity, healthcare, education
- Review entries ensuring there are no duplicates
- Record the amount you spent for each purchase in each category
- Record date of purchase and vendor
- Look for Budget Busters
- Check credit card purchases carefully. Did you charge gas or food items with your credit card? Remember if the entire bill is not paid off in full each month, you may have increased costs due interest charges.
- Look for any unplanned trips, gifts or expenses.
- Identify and separate items that you really needed and those you could have lived without
- Determine necessity of spending for current month based on what you've learned about from the budget checkup
- Review financial goals
- Write your financial goals down, if you have not done so already
- Identify the cost of each financial goal in dollars and cents
- Look at your savings; write down how much you've saved thus far
- Subtract the cost of the goal from current savings and write down how much more you have to save
- Reward yourself. Do something nice for yourself that won't bust your budget.
Goal Checkup Example
For example, if one of your financial goals is to save for a three-day trip to Vegas. List the cost of the trip, how much you've saved so far and keep a tally of what's left to save.
Money Management Tools
Finally, use money management tools to make the budgeting process easier. Sites such as Mint.com automate budgeting by helping you track and monitor your spending online. In the end you spend less time budgeting, and doing more of the things you love. Investigate Mint.com today.