57
Chapter 3: Building and Sticking to a Budget
Book I
Taking
Charge
of Your
Finances
Carry a small notebook or some other small record-keeping device with you
for writing down everything you purchase with cash, a debit card, or a credit
card each day. Keep all your receipts as well. You'll need this information at
the end of each month when it's time to evaluate how well you're doing.
Checking your progress each month
To live on a budget, each month you must compare your actual monthly
spending to what you budgeted. Here's how:
1. On your monthly budget, add a column to the right of each dollar
amount that's labeled "Actual."
2. Compile all your spending records for the month (check registers,
bank statements, receipts, the information in your spending notebook)
and all your income records to figure out your actual expense and
income numbers.
3. Record these amounts in the appropriate places in the "Actual"
column of your budget for the month.
4. Calculate subtotals and grand totals for the month.
If you spent more than you budgeted on something, or if your total spending
exceeded what you budgeted, try to figure out why you spent more. Here are
some possible explanations:
You overlooked a living expense or debt when you developed your
budget.
Your budget isn't realistic. It's too bare bones, so it's impossible for you
and your family to live on it.
Your family didn't try hard enough to live according to your budget.
Making a budget work takes a 100 percent commitment from everyone in
your household.
You were hit with an unexpected expense that month. For exam-
ple, you were working late at the office, so your childcare expenses
increased, or your car broke down and you had to spend money to fix it.
Some of your expenses increased for reasons beyond your control.
The cost of gas went up or your insurance premium increased, for
example.
Your income dropped. Maybe you had to take a cut in pay, your sales
commissions were lower than usual, or a client didn't pay you.
