Creating a Budget for 2012

It’s hard to believe that 2011 is coming to a close. Christmas is already over, but if you overspent this year, you might be paying for your Christmas purchases for months to come.
That’s not a great way to start the new year, but you can get your finances on the right track by creating a budget for 2012 and sticking to it. But first, let’s talk about that credit card bill.

Experts recommend laying out everything you owe. Gather up all of your credit cards, for example, and write down the balance on each. What is your minimum payment for each card and which card do you owe the most on? Concentrate on paying more on the higher-balance card until it’s paid off. Then continue this process until all of your cards have a zero balance. Ask yourself if you really need more than one credit card. If you don’t, cut up everything you don’t need so you won’t be tempted to use it.

Now for the budget. Create a simple worksheet in Excel and write down every bill you receive each month along with the amount due. Total up your bills then subtract that total from the income you bring in each month. What’s left over represents how much extra money you have to spend. Once you know exactly what you have to operate on, you can better organize your finances and know what you can and cannot afford to buy. Don’t forget to include things like groceries, gas, child care, and money to put into savings when creating your monthly budget.

Some people may be shocked at how much money they don’t have left over each month. What can you get rid of? Maybe you can you lower your cable bill by selecting a different plan, or cut coupons and stick to a strict grocery list each week.

Make 2012 a year of good financial decisions. A little discipline can go a long way.

Happy 2012!