Considering that women, on average, control 80% of household spending, now is as good a time as any to really get your arms around where your money comes from and where it goes. We may all have a basic idea, but you will be very surprised at how quickly certain items add up to become a significant drain on your assets.
The thought of preparing a budget may appear very daunting. But by breaking the process down into steps and categories, this very important task will prove manageable.
Step 1: Gather financial statements
To get started, you need to first determine if your income and expense information is online somewhere, such as a Quicken spreadsheet. If it is, your task will be much easier. If it is not, like so many of us, you must gather your financial statements. This includes paychecks, bank statements, and bills. The spreadsheet below will help remind you of the many possible statements to collect. Just remember, the more thorough you are now in providing honest and detailed information, the easier it will be to assess where you can “trim the fat” to achieve your financial goals.
Step 2: Complete Budget Worksheet
Below are two different worksheets. The first is an annual budget broken out month by month in an Excel Spreadsheet. The second is an aggregate worksheet in a word document that you can fill out and print. You will be surprised at how simple and eye-opening this step will be.
Annual Budget Worksheet
Budget Worksheet
Step 3: Categorize expenses as fixed or variable
The hardest part is already done (except for possibly changing your spending habits 
. Now, you must separate your expenses into fixed and variable expenses. Fixed expenses stay relatively the same from month to month (such as a mortgage or car payment). This does not mean that these expenses are off-limits for possible reduction, such as switching cable providers or refinancing a mortgage. However, the variable expenses do change from month to month. Thus, this category provides an excellent opportunity for “cutting back.”
Step 4: Monitor Budget
It would be silly to have gone to all this work preparing your budget to just to file it away. Instead, it will be very important to review your budget on a regular basis to make sure you are staying on track. Try to collect receipts for cash purchases during each month so that you have a more accurate accounting of your actual expenses. Each month, set aside some time to compare the actual expenses versus what you had estimated in your budget. This will show you where you did well and where you may need to improve.
Step 5: Visit rubbingnickels.com for Money-saving and Income-Producing Tips
This is why we are here. To help you make those adjustments to your expenses and help you increase your “bottom-line.” You never know: Your cutting back, might actually help you move forward and attain those financial goals sooner than you thought.
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