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Q: I need to budget effectively but am so exasperated I don't even know where to start. Is there any hope?
A: Yes! First of all, take a deep breath, and take it a step at a time!
My best piece of advice is to get organized. Financial organization will take you further than anything else you could possibly do.
Start with the papers. Gather and separate all the statements, receipts, etc. Create a filing system, if you haven't already.
Secondly, if you are not in the habit, get your checkbook organized and reconciled. Once you've gotten to this point, it will be easier to lay everything on the table and look at it. You need to ascertain how much money is coming in. Then, the best you can, estimate and itemize your expenses. Look through your receipts and checkbook, and try to distill it down to what you can expect on a monthly (weekly, or biweekly) basis.
Now, of course, comes the fun part. What if your expenses are greater than your income? Decisions will have to be made, but at this point you have more information on which to base them. I promise if you do the steps above, you will no doubt immediately come up with areas for improvement and ways you can change some things. The simple act of getting organized and laying things out will point to things you may not have paid much attention to before-and, had you only known, would change your behavior.
In my book, I the analogy of that cluttered hall closet. You know the one-the one you are afraid to open lest you be hit on the head by a cascade of falling junk-the one everyone puts things into but never takes anything out of. Picture it in your mind for a moment. Now imagine everything out and laying on the floor where you can see and study it. And now that the stuff is out, you might be motivated to install a few new shelves or racks. Now put everything back in a neat and organized arrangement. But what happened? It all went back, with room to spare! And yes, you'd have even more room (read that as even more money!) if you got rid of those old muddy galoshes with holes in the bottom, the broken baseball bat, and the jigsaw puzzle with half the pieces missing!
Most people believe "going on a budget" is the same thing as "going on a diet"-- you must "suffer" and "give up." It is more accurate to understand that budgeting is organizing your money so YOU can make the most intelligent decisions. This isn't to sugarcoat; you still may have to make some hard decisions, but at least you will have the full picture. From the analogy above you can see you do not have to give up anything...but you will probably want to rid yourself of unnecessary wastes.
Most budgetary concerns are really founded in fear-fear of not knowing and understanding exactly what your situation is. Getting organized and just giving yourself the gift of good information on which to base your decisions will take much of that stress away. As the old adage goes, knowledge is power.
After you accomplish this, the next logical step would be to implement and maintain this new organization system (okay, let's call it a BUDGET!) to continue to give you the feedback and up front planning tools you need to steer you in the right direction.
Jane Chidester (Jane@TulipTreePress.com) is the author of _BudgetYes! 21st Century Solutions for Taking Control of Your Money Now!_ Visit her Web site at TulipTreePress.com Budget Central: Personal Budgeting Information and Resources Repository of information and resources on personal budgeting, financial planning, and household money management--a complete budgeting education.
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