The dreaded B word - Budget

When I teach financial management classes I love to look at the attendees faces when we talk about budgets. Some actually grimace at the very mention of the word. Then I ask them to share words they associate with budgeting. Constraining, stressful, dreaded, limiting, and painful are just a few. I usually have one or two attendees from a previous class in attendance and I ask them to describe how they now feel about budgeting. Empowering is probably the most common. Empowering, really, a budget can be empowering. Yes, because you are telling your money where to go instead of watching where it went.

Last year Dave Ramsey's national radio show started doing a live video feed of the program at http://www.daveramsey.com/show/videos/. Whenever I have the time I try to listen to the program and have noticed a pattern, even Dave points it out. Everyone who is debt free has one thing in common - A budget!

How do you begin using a budget?  First, I recommend going to Dave's web site and downloading the quick start budget. This is a very simple and basic budget that won't overwhelm you on your first attempt. It just covers the basics and gets you familiar with the concepts. If you are married use this as a good starting point to learn how to work together as a team.

Next it is time to work on the the Monthly Cash Flow Planning found on the same web page. This is where you write down everything and begin to really tell your money what to do. You will spend more time on this form than you did with the quick start budget. Make sure you include everything in this budget. For you debts write down the minimum payments and later we will figure out how to pay them off faster.

Congratulations, you have done your first monthly budget. Now every week review it to make sure you are on track and before the beginning of the next month create a new one for the upcoming month. As you become more comfortable with creating a monthly budget you may decide to shift to different format than Dave Ramsey's forms. The important thing is to find what works for you.

Happy Savings!