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Budgeting is a very important habit that will reduce stress, and give you control of your finances but most importantly… save you from getting into debt to cover expenses that can be managed for throughout the year.

Plan ahead for events that will come whether you are prepared or not like Christmas, it comes around every year at the same time. Plan for birthday gifts, an anniversary, upcoming graduation, and/or vacation. Plus, don’t be caught totally surprised when the car needs maintenance. With a planned budget for these types of expenses you will find that you will get to experience the event without stress.


Please, Please do not consider using debt or credit cards to manage your finances. Make this your primary resolution every year until you do not have any debt. The credit industry is 90% of the reason why Americans are in debt and suffer from stress related illnesses and the number 1 reason for bankruptcies and family strife. We will cover more information on the effects of debt to our well-being in the coming months.

The first step is to take a good look at your income and expenses for a month. If you use software to manage your finances pull a report that will give you a picture of how your finances are being spent in a given month. You can use a basic worksheet I have used to get started. Click here to download it.Monthly Income.Expense worksheet

Once you have entered your expenses and income you can now work on planning to manage your finances. I have used Dave Ramsey’s approach to have a zero based budget, which means that every dollar that is earned or received has a place for it. For example if I earn $2000 in a month the total $2000 is assigned by category on my budget.

Have a plan for any unexpected changes to your income. For example, if by chance I have an increase to my income or receive a financial gift, and/or get some money from other sources like selling stuff from garage sale.

I have an ongoing list of how and where to apply that change. We all do it, when we think of how you would spend the millions if you bought that winning lottery ticket. Therefore, plan ahead to for those nice surprises. Determine the  amount be allocated to a category on the budget like vacation fund, paying more to credit card debt or clothing budget. Allowing for complete control for your choices.

If you are married decide together to make time to work on a monthly/yearly budget. Make sure you both are participating in the goals for the financial success of your household and future. Plan to reevaluate monthly.

If you are single confide with a trusted friend or mentor to help you be realistic about your budgeting plans. Meet with them regularly so you stay on track.