How can I make my budget work for me?

What is a budget?

The word budget is a scary word for many people, but it is really a very simple concept. A personal budget is a document that lists what your income is every month, and what you spend you money on every month. It can be done on a piece of paper, or on a computer. It is simply a list of your "ins and outs" each month.

Once you have created your budget, you will realize that there are only two ways to increase your cash flow each month: either you increase your income, or your reduce your expenses.

How can I increase my income?

There are many ways to increase your income; consider some of the following suggestions:

	Work more overtime (if it's available)
	Get a second job
	Start a home-based business
	Take in a boarder or room-mate
	Try to find a better paying job

Remember to always consider the consequences when you try to increase your income. More overtime may mean less family time which, in the long-run, may not help you at all.

How can I reduce my expenses?

For most people, reducing expenses is a more immediate way to increase their cash flow than increasing your income.

Review your budget, line by line. Ask yourself: can I cut this expense?

Here are some suggestions:

	Consider ways to reduce your housing costs, such as moving to a smaller house or apartment or taking in a border or roommate.
	Look at all of your non-essential expenditures, such as cigarettes and alcohol. By quitting smoking or reducing the amount you drink, you can free up a lot of cash each month.
	Cut your cable bill by switching to basic cable. This may be hard in the winter, but makes sense in the summer when you spend more time outside and watch less television.
	Reduce your phone bill by eliminating non-essentials like call display and call forwarding. Cut your long distance bills by calling over your computer using a free service like Skype.
	Look at how much you spend on credit cards; pay off high interest balances first.
	Consider buying a coffee maker and a travel mug, and making your own coffee each morning, instead of buying it.

By looking at everything you spend money on, you can cut your expenses and make your budget work for you.