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Creating a budget is probably not something that a lot of people enjoy. Instead, you want to think about the end
product – control and saving money. After all, the goal is what a budget is all about.
Start out by calculating two things – your expenses and all your income. Your expenses includes every single penny that
goes out – whether it is used to pay a bill or cash paid for a candy bar. You want to know where all of it goes.
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Effective budgeting requires that you understand where your money goes, and this includes your cash, too. It is easy to let cash slip through your fingers – or your spouse's – and a lot of money can be lost every month. Learning to become more frugal will be a necessity, but see where it is going first and then you can make some wise changes once you know.
In order to understand where your cash goes, it may be necessary to record every cash transaction for a week or two, and then add it all up by category (gas, coffee, fast food, snacks, groceries, etc.). This will enable you to see some of the holes in your wallets.
Finally, calculate all your income. This includes things like retirement,, child support, salary, and anywhere else you get money from. Tomorrow I'll show you what to do with these numbers and how to make some adjustments to your household budgets.
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