What writer couldn’t use some help with budgeting? After all, we’re often called to live frugally while we build up our freelance business, search for a publisher, or deal with a changing economy. The following guest article form Edna Washington offers five tips on making your budget work.

By Edna Washington

Budgeting is about making sound financial choices. Creating a budget will help one map out a schedule for saving and spending, as well as plan for meeting your regular expenses in a given period of time. Are you making sound financial choices? The choices you make affect your future financial plans. In order for a budget to be successful several things must be taken into consideration.

Organize A Plan
Organize a plan to determine how much you are currently spending. To start on the road to budgeting one can create several different budgeting tools. A budget worksheet, or a calendar. A simple method would be to create a folder to keep receipts for the a given month. Separate the receipts into categories based on the expense. For example, keep all receipts for grocery purchases, auto expenses, and other household expenses. (Utilities, phone, cable.) Total each expense category. This will help you begin to get a handle on your current spending.

Determine What Can Be Adjusted
Determine what you should absolutely spend money on and what could be adjusted. In these financial times many families and businesses have to make adjustments in spending in order to ensure their survival. After determining how much has been spent in each category area you can now begin to make adjustments. One category that should be included in your expenses is savings. Make sure you save to help meet household emergencies. The expenses should be those that are necessary.

Balance Your Budget
Is your budget balanced? The total expenses should not be more than the income derived from all sources. For example, if your total monthly expenses are $2000.00 and your total income from all sources is $1800.00 your budget is out of balance. There is no income left to cover future or emergency expenses. Once you have a budget set you can then compare your actual spending to the budget you have set

Be Realistic
Are your goals realistic? Don’t set budget limits that are not attainable. Do you have a goal that your budget helps you reach? Set goals and stay within your budget. Are you trying to purchase a home? Are you working on setting funds aside for your education? Do you have dreams of entrepreneurship? Personal budgeting habits help in setting business goals.

Be Flexible
Once you have a handle on your spending be flexible. Maybe you could make an adjustment in one spending category in order to save more. By saving more you are able to reach your goal sooner. If you are saving 10% of your income try saving 12%. Over time you will see that even a small increase in saving can make a difference.

To view a budget worksheet example see the link http://financialplan.about.com/cs/budgeting/l/blbudget.htm. Use an online system for tracking your finances at www.mint.com.

Edna Washington is a Detroit area-based consultant and founder of Washington Consultants, LLC. She helps small businesses establish and maintain their accounting system. She comes to Washington Consultants with over 15 years accounting and computer experience. Washington Consultants provides accounting and computer services to small businesses. Computer skills training for youth and adults is also a service offered by Washington Consultants.

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