However, this may not be true for everyone, as many of us have experienced financial difficulties throughout the year and are penny-pinching, knowing that all our funds were spent either in “back to school” activities or paying off debt.

Don’t worry, as it is not too late to start budgeting. In fact, you’re just in time to start planning for next year, and this includes finding ways to budget your regular income.

To some, budgeting may seem daunting, as they may believe it means severely cutting back with no hope in sight, but budgeting is important, especially if one is working towards a particular goal, such as a home, a car, vacation a wedding or to pay tuition fees.

So here are a few tips:

Tracking Your Income
The very first thing to do is determine how much money you have to save. To arrive at this figure, list all your daily expenses, such as movie rentals, mortgage/rent, school fees, food for the month, gas, magazine subscriptions and utilities. When you have made that list, then look at your monthly income, which includes your salary, dividends, interest from your investments, etc.
With all this information, total your monthly income and all your monthly expenses, then subtract your expenses total from your income total, and you’ll then have a positive or a negative number. If there is a positive number, CONGRATULATIONS as you’re spending less than you earn. If you get a negative number, then don’t be alarmed, as you can properly assess your spending habits, and make a plan on how to reduce your expenses.

Revisit Your Accounts
Are you saddled with outstanding debt such as mortgages, car loans, and credit cards? Now is the time to revisit your payment terms, and assess your current interest rates, and whether you can refinance these various loans. If you find that your interest rate is being hiked, call or visit your lending institution and ask for an alternative payment plan. If it is a credit card, stop using it, and make sure you allocate a particular sum of money to paying off this debt monthly.

Clean Out Your Closet
Some women and men constantly shop for new clothes, but in all honesty they have enough clothes in their closet to last for a lifetime, including clothes that they have either never worn, or worn only once. Well, the reality of life is that in these times, one of the first expenses that you can either cut out totally, or reduce significantly, from your budget is your clothes shopping bill.
Be Realistic

Setting your goals too high will ultimately lead to disappointment and frustration if you fail to attain them. The best way is to start small, with short deadlines, and then build on your goals as time passes and then set your goals a little higher. This will guarantee that you will stay motivated as you’re more likely to accomplish these tasks.

Remain Focused and Committed
While maintaining your budget, there may be times that you’re tempted and so will veer off the beaten path. However, if you maintain a positive attitude and remain true to your goals, budgeting will become your lifestyle and therefore, temptation will be easier to avoid. Should you accomplish that task before your deadline, then you may reward yourself with something that you will definitely enjoy.

How to Budget

Start with a clear picture of your finances.

• Write down each source of income and the dollar amount. Use one line for each. Adding them together will give you your Total Monthly Income.
• Keep all receipts – savings, deposits, food, rent, mortgage, ATM, shopping, utilities, etc. Write down the uses of the funds and the amounts, using one line for each. Together, they makeup your Total Monthly Expenditure.
• Subtract the Total Monthly Expenditure from the Total Monthly Income to calculate your monthly balance.

For the first timers, expect to be surprised at your spending habits. That’s just the picture. Now make the budget.

To develop your budget, ask yourself: Do I like this picture? Am I going to achieve my goals? If the answer is no, do something about it. Ask yourself: Am I satisfied with my monthly balance? A negative balance means you are living beyond your means. Aim for a positive balance, that is, a surplus. How? Try to eliminate or reduce categories of spending.

Having each as a line item show where you can readily make changes. This is why a budget is so empowering. Be realistic, but be willing to take hard decisions. When you get a positive balance, ask yourself: Do I want more money to save or invest? If so, look at those categories and amounts again. Always remember, the budget is to help you to meet your goals. Try to plan 3-5 years into the future.

Sticking to Your Budget

The benefit of budgeting comes from sticking to it.

• Start saving and pay without sacrificing savings for other expenditure.
• Save for purchases rather than using credit cards or higher purchase, which can result in un-budgeted interest expenses.
• Avoid cash and use ATM card for purchases. ATM cards provide receipts for purchases to help you monitor expenses. Plus without “spare cash” you are unlikely to buy “un-budgeted extras”.

Knowledge is power. A budget gives you the information to eliminate and reduce expenses, pay debts on time, and find more money to save and invest. Control your money. Don’t let money control you.