3 Simple Steps to Create a Seriously Savvy Budget

3 Simple Steps to Create a Seriously Savvy Budget

Do you follow a budget? Need some help to get started?

No, budgets are not attractive, fun or exciting in any way shape or form.  They are, however, the necessary evil that can assist in getting you and your family’s spending and saving habits back on track.  It’s difficult to understand why more individuals don’t already adhere to a budget, what with the economic crisis and unemployment still looming above us. It would seem that the majority of individuals without a budget either don’t think they need one, are unaware of its benefits, or simply don’t like discussing or even thinking about their financial situation. 

The unfortunate part about that last point is the fact that implementing a personal or family budget can help dig those individuals out of the financial holes they’ve already put themselves in.  And the best part?  It’s ridiculously easy to do.  From writing everything down on your own to downloading or purchasing budget software, technology has made it extremely simple to execute.

The first step ...

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The Tax Man Cometh: Ever Wonder How He Spends Your Money?

Every year you repeat the same tired task. You collect all your receipts forms, and related tax information and either settle in for a marathon self-preparation session, or you hand it all over (along with a few hundred bucks, give or take) to your tax preparer. When all's said and done, you'll see exactly how much money the federal government took from your paychecks, but you certainly don't see an itemized list of where that money will go.

However, in his 2011 State of the Union Address, President Obama pledged to develop a new online tool that would allow every American to see precisely how the government spends his or her annual tax payments. The resulting and first-of-its-kind public website, “My Federal Tax Receipt,” launched last year and was just recently updated to reflect current spending. The tool is an online calculator, located at www.whitehouse.gov/2011-taxreceipt. Once there, you simply enter your income tax, Medicare tax Social Security tax, and a detailed calculation of how your tax dollars are allocated pops up on the screen.

Having a better understanding of what we pay for and how makes us stronger citizens, and let’s face it, its information we deserve to know.

But you don't actually have to do anything at all to satisfy your general curiosity — after all you could just simply scan the numbers and learn how much of the collective federal income tax is allocated where, as its all broken into categories and subcategories and measured by percentage. While the information on the site is incredibly informative, intriguing, and perhaps even a bit surprising, I'd be less than honest if I neglected the site's democratic political bent, but the information is still interesting, despite the occasional overt partisan prose.

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How to Dig Yourself Out of Debt

 

 Debt: the deep hole that seems so effortless to dig but impossible to climb out from.  With every new credit plan comes a barrage of danger for consumers already drowning in bills.  It’s a problem that millions of Americans struggle through every day and for many it seems that there is no end in sight.  The pile of debt can get so high that it’s hard to find a place to start, which is often times the most difficult step.  It’s similar to the people on those “Hoarders” shows, when every room is piled high with junk the task can seem too daunting to even begin.  Hours and hours of work hardly make a dent and progress is difficult to achieve.  But for those looking at an uphill climb out of debt, there are ways to make those first few steps easier, and more productive.

Once you have dug yourself out, don’t fall back in.  Often times, the freedom associated with people becoming debt free leads to the same habits and behaviors that caused the debt in the first place.


The first main process on the road to recovery is to recognize and break your bad habits.  There is no point in doing the work to get out of debt if you will simply bury yourself back into it in a year.  You need to take the time to recognize the spending behaviors that have caused the problem in the first place and work to break them.  Take a look at your budget for each month, and make more of an effort to live within it. One way to do this: stop using credit cards.  Consumers find it increasingly easy to mindlessly swipe their plastic through every register they see.  By limiting yourself to cash or debit accounts you will be more aware of your spending and unable to add to your debt problem in the process.  Once you have curbed the problem you are ready to begin your journey.

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