Personal Finance Budgeting

During the latter half of 2009 millions of people decided that they needed to do something radically with their cash flow, they needed to stop spending & start a budget. Personal finance budgeting seemed like a foreign invader to most of these people, many never had to do a budget in their lives. If you’re in your 20’s you probably have never saved, this is the way its been for a number of years now.

So, how do you get started in the world of budgeting & is it hard. The answer to this is that you need to sit down with a pen and paper & take a good honest look at all of your finances, you then need to balance everything out & most importantly of all get rid of anything which is not needed such as credit card debt.

1: Shopping Budget
First of all take a look at your house budget, odds are you don’t have one so now is the time to start creating one. Take a look at where you buy your food; are you paying way too much for basic food stuffs? The odds are that you are, many people don’t see what they’re spending on food because they think its a necessity. They’re right; food is a necessity but is junk food a necessity? Yes, that’s right, most of the food in your shopping trolley is usually junk & guess what, not only is junk food bad for you it’s also far more expensive than good wholesome food.

2: Household Budget
Once you’ve figured that a good chuck of your budget is going on junk food, then you’re on your way to a proper household budget. Next, take a look at your bills, like gas, electricity etc. is there any way you could switch to a new provider & make savings. With green energy making headways these days, there is almost always another alternative to your current electricity provider so go for it; they usually will give you a few hundred dollars off your yearly bill which all adds up. Another area where a good amount of the household budget goes is lighting. Change over your light bulbs for energy saving light bulbs which can be over 10 times more efficient.

3: Credit Card Budget
Next on your list should be the credit card. If you have one, which almost anyone with a job these days has then you should do your upmost to get rid of the debt on it. Credit card debt can be crippling so its imperative that you get rid of it as soon as you can. So, with a credit card debt plan underway & your day to day house expenses taken care of you should be almost half way there.

4: Tackling your Mortgage
Next you’ll need to take a look at your mortgage provider & see if they really are giving you the best deal available. Many mortgages are really just taking excessive amounts of money from you so shop around & take advantage of what’s on offer. Millions of people have switched their mortgages over the last couple of years & have saved several thousand doing so, after all its just a simple phone call so get moving & change your mortgage if you need to.

5: Auto Finance Budget
The next area of the personal financial budgeting process is the car. Yes, the car is probably one area which most people don’t want to go but it has to be done at some stage so it might as well be now. What many people are doing right now is selling their 4x4’s and getting something cheaper so that they can clear their debts. So, let’s say you have an expensive car that’s worth $30k or so, you decide to sell, with the money you get you can pay off the remaining debt on your credit card. The average debt on credit cards per person stands at around $8k so if you can clear this with the sale of your car then you’ll save a fortune because you don’t have to pay the 12% or 14% interest which they charge you every year, so if you count all this up you can save a lot of money. Also, you can buy a pretty good car with the remaining money from the sale; you could easily pick up a nice car for under $8k.

6: Lifestyle Changes
Once you’ve incorporated all the mentioned above into your personal finance budget then its time to take a look at your lifestyle. Are you a member of the local Gym? Do you use this membership on a regular basis or are you just like the rest of the dreamers out there who take a trip a few times a year just to feel good about themselves? If you’re the latter then I’d suggest you get rid of the gym membership altogether & do your exercise at home, there are many home gym trainers you can purchase these days which will do the same thing for you.

Another area of your budget you’ll need to tackle is your eating out & drinking. Do you eat out regularly? Can you cut back on this? Yes of course you can, you could cook the same meal at home for a 10^th of the cost. If you like your beer & are unwilling to give it up then why not think about home brewing, you’ll save a fortune & the brew kits have improved over the years so you won’t even know the difference.

Once you’ve put all the above into practice you’ll be amazed at how easy it is & you’ll probably kick yourself for spending all that money on junk. Remember, if you put just a few thousand dollars a way every year in a high interest saving account, this would make you a fortune in the long term, that the power of money, money makes money as they say & its true so get wise & start your personal finance budgeting plan now.

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