Guest Blog: A Budget That Works for You

Creating a personalized budget is simple once you determine what percentage of your monthly income is to be set aside for bills. You start by totaling all your debt and all sources of income before you can decide what amount can be designated per expense category.

List essential categories first, followed by other basic monthly bills. For example, Utilities, Food, House, and Medical will be the top priorities. Expenses such as Family, Clothing and Transportation will come next, followed by the non-essentials: Entertainment, Debt and Investments. Here is a break-down of these categories:

Utilities: water & sewer, gas &/or oil, electric, telephone (wireless &/or land-lines)

Food: eating out, groceries, snacks, or lunches; using coupons when grocery shopping offers extra savings, especially for sale items.

House: mortgage or rent payment, repairs, property taxes

Medical: prescriptions, health insurance, co-pays or relevant out-of-pocket costs

Family: child support, alimony, or child care

Clothing: work, school, formal occasions, uniforms

Transportation: repairs and maintenance, gas, auto payments and insurance: also includes buses, subway, or toll booths.

Entertainment: vacations, subscriptions, club memberships, movie rentals or cinema tickets, satellite or other television services

Debt: student loans, credit cards, business loans

Investments: 401K, Christmas club, stocks, savings accounts, or college funds

Don’t overlook the occasional, miscellaneous expenses such as birthdays, weddings, anniversaries, and unplanned special occasions. Other expenses to plan ahead for are the seasonal ones like swimsuits, summer camps, field trips, new clothes and shoes for school, and school functions.

One easy way to start your budget system is to buy a cheap coupon organizer, create your categories and for each one, put in the allotted amount of cash. Be sure to take care of the essential expenses first. Taking this first major step sets you on the path to becoming free of debt and effectively managing your hard earned money.

A budget that is customized for you is vital for effective money management. Keep in mind that your debt was not created overnight and a budget is simply a tool that’s useless unless put into action. It may take a few months before you see the positive results of sticking to your budget. Creating your own budget by using these categories of basic expenses is the fastest and easiest way of reducing your debt and learning how to properly handle finances.

If you need more precise guidelines to help you start the process of building your own budget, there are many resources available to you. Several of these can be found on the Internet simply by doing a search on “budgets” or “how to do a budget”.



Debbie Dragon is a freelance writer providing articles for Billeater.com, a site that helps it's readers save money, with unique money saving tips and tricks for your busy lifestyle.

Making Your Money Go Farther

This guest post is by Tisha Tolar, a writer for DebtFreeDestiny.com, where she provides information about credit card consolidation, debt relief and how to get out of debt.


With falling stock prices and job layoffs, stretching your money is more important now than it has been in many years. Budgeting is a common technique for managing money; yet many people find the budgeting process too convoluted. The spreadsheets and receipts become overwhelming.

With any system, if it becomes too much work, you quit doing it. The solution for finding the right way to track your spending involves creating a system that is simple and easy to use with no more than one or two steps.

Instead of using a combination of credit cards, checks, debit cards and cash, use an envelope system. The envelope system involves the use of only cash. This system pays for expenses such as food, haircuts, entertainment, gasoline, gifts and clothing. It generally does not cover fixed expenses such as mortgage, utilities, and telephone, tuition and loan payments. Here is how it works:

Determine how much money you should be spending or have available to spend each month. Note that the amount should not exceed the disposable income you have available after paying your fixed expenses.
To arrive at this amount, subtract your monthly fixed expenses from your monthly income. The amount left is your disposable amount.
Divide your monthly disposable amount of money by four. This is how you arrive at your weekly budget.
Put cash in an envelope equal to the weekly amount you set aside.
For one week, all the money you spend comes from the cash in the envelope. This means you will not be using credit cards, debit cards or writing checks. This also means you don’t have to transfer the information from your receipts to a gad-awful spreadsheet.
At the end of the week, any leftover funds can be set aside for emergencies or larger purchases. Another option is to move the leftover money into next week’s envelope.

The cash envelope system will stretch your money as it will force you to become more aware of how you spend your money. For example, if it is Tuesday and you only have $20 left for the rest of the week, you might decide to forgo going out for lunch and instead swing by home to eat leftover pizza from last night.

As you use the cash envelope system you will likely become more familiar with the concept of cash flow. For instance, if you buy $50 of groceries on Monday and by the end of the week, your family will only eat $20 of those groceries purchased, you have an extra $30 of food sitting on your pantry shelves. That same $30 could have been used on Thursday for haircuts or an evening at the movie theater.

In addition to helping you determine what is truly valuable in your life, this thought provoking system will stretch your dollar, put you in control and leave you feeling much better about yourself.

This guest post is by - Tisha Tolar is a writer for DebtFreeDestiny.com, where she provides information about credit card consolidation, debt relief and how to get out of debt.

New Video: P3. What is an ISA? (UK)

An Individual Savings Account or ISA is one of the most common and easy to access saving and investing tools in the UK. This video provides an summary of this products.

P2. What is a 401k Plan?

401k plans are spoken about very frequently in the US, and represent a potentially very tax efficient manner for money to be set aside for the future. This video introduces what 401k plans are - building on the concepts of taxes and compounding, providers and users of capital, principles of taxation, mutual funds and even dollar-cost averaging.

New Video: P1. Structures, Products and Services

This is an introductory video to some of the structures, products and services that we as investors have to consider on a regular basis. It builds on the concepts and examples of products of the other videos - in this series the items discussed are often more specific, and often specific to a country or region as opposed to being more generic and potentially available in many regions.

New Video: S2. Securitization, CDOs and the Sub-Prime Crisis

The volume of issue of CDOs and the corresponding ability of banks to issue mortgages had a significant impact on the quantity of mortgages that could be made by banks. This video explores the topic of securitization further with a particular focus on CDOs and how that relates to the sub-prime crisis.

E3B. Introduction to Deflation

Deflation very much related to the subject of inflation, and in fact is a negative rate of inflation (i.e. prices are falling) for a sustained period of time. This video introduces deflation and some of the issues associated with it.

New Video: 36C. Defined Contribution Plans

Defined Contribution Plans are the other of the two main pension plans available for many employees - and in fact, they have become the prevalent form of retirement or pension plan type in most countries, particularly in the private sector.

New Video: 36B. Defined Benefit Pension Plans

Defined benefit pension plans are one of the two main categories of pension plans available. This video follows on from the types of pension plans video to provide more information on this particular type.

New Video: 25. Closed-Ended Funds

We sometimes hear about closed-ended funds which are a type of fund that shares similarities with standard mutual funds which are open-ended, but also has some very key difference in particular with respect to how money flows in and out of the funds.

New Video: 18. Dividends

Companies can pay out a part of their earnings in the form of dividends which shareholders receive as one element of their potential return (the other being capital appreciation).

This video provides more information on this and how this looks both from the company's and the investor's perspective.

Although dividends come up in a number of other videos, this video focuses specifically on the subject.

New Video: CF1: Dividend Policy

Deciding how large a dividend to pay, or whether to pay a dividend is one of the corporate finance decisions that companies have to take. It is partly influenced by the companies desires and nature of business and corporate finance considerations, and partly by the nature of investors. This is the first in a series of videos on corporate finance issues.

New Video: S1: What is Securitization?

Securitization has come up a lot recently, especially in the context of the sub-prime mortgage crisis. This is a first introductory video describing briefly what securitization is.