OK, we had to write something to entice you into this article... Chances are that you find the idea of doing a budget as appealing as doing your tax return - and about as much fun. If, on the other hand, you're one of those people who find budgeting easy, who pay off credit cards before the interest becomes due, who don't feel deprived of life's little rewards, great work. You may not need to read this article. For those who don't like budgeting and maybe feel like they don't know where to start hopefully this will help you along the way.

If you have tried budgeting before but have always given up, it's most likely that your figures were either unrealistic or too inflexible. You may have been overly strict about the amount you allowed yourself for expenses, which made you feel a failure because you kept having to dip into the part you'd set aside for savings. Or perhaps you had some change in your circumstances (house move, change of jobs) which made budget unworkable, so off it went to the "too hard" basket.

Sometimes you think you are going along fine then suddenly there is a surprise which throws your finances off kilter. Don't let this put you off: regardless of what your figures reveal, it's the first step towards gaining control of your finances and it will give you a great sense of accomplishment.

The aim is not to make yourself unhappy and feel cheated so you feel like you can't afford anything. It's quite the opposite. It can be very empowering knowing how to control your finances.

When you do buy something you don't feel guilty or have a feeling of being out of control. You actually controlled when you and how much you could spend. You also may get to a point where you start to put aside funds to save for an investment.

There are a number of ways to do a budget. You can use a computer and set up spreadsheets and fill them in there. You can also use a paper base method and use a notebook for your daily expenses in your bag. Whichever works for you? There are software programs you can also use. A number of financial institutions have web based budgets too.

Of course budgeting is a bit like dieting you need: to be realistic, give yourself some flexibility and, above all build in some rewards now and then. The following step by step guide will help you off on your budget year.

Step 1 - List your income from all sources. Income such as your salary is fixed for the year, making it the most reliable known inflow. Other earnings, such as overtime, bonuses and tax refunds may vary. You may need to go back over past statements and consider any changes to these figures. It's best to underestimate than over. If you are self employed and your income may vary, it's easier to enter your income against the month you invoiced it.

Total the amount of income from all sources on the right hand side of your page.

Step 2- List each of your fixed expenses. This can be recorded in the month in which they are incurred or the one which you pay them. Fixed expenses are the expenses which are known and don't often vary as to when they are paid. Such as electricity bills, mortgage payments.

Fixed expenses include money you put into your superannuation (shown on your pay slip), emergency money set aside and holiday savings. When you have listed all your known expenses add them up and total them also on the right hand side.

Step 3 - List your controllable expenses - These are the ones over which you have some discretion, like how often you go to the movies each pay or dine out. Food costs too can be controllable, whether you go to the market, or aldi or the gourmet section in your supermarket you can control these decisions. It is how much you spend in this category that will determine whether there is anything left over that you can start saving.

If you don't know how much you spend when you go shopping, start by gathering up all your receipts and credit card statements. Look at for example the last few months and see what clothes you bought if it totaled $600 for 3 months then you can put in your monthly budget $200 for clothes.

Credit card purchases can also be allocated to controllable expenses. If you pay certain items on your credit card then and it is paid off before you get charged interest then they aren't put into this category. Credit card purchase though is generally impulse buying which you can control. Therefore, if you have purchases on credit and you have a balance outstanding and are changed interest then you need to pay a set amount to this each month and concentrate on reducing this balance to nil.

When you have the controllable expenses, total the amount on the right hand side.

Step 4 - Deduct your total expenses from your total income. Don't panic or be discouraged if the amount left over is less than you thought or even negative. This is a work in progress and you can control this along the way.

Congratulations - you have begun to take control!! Now you can take a closer look at what you're spending your money on and why, and to try to establish your real priorities.
Lifetime Habits for money success

• Set yourself financial goals that are achievable
• Always keep track of your income and expenses
• Treat your income seriously, and use some of it to secure your future.
• In your job, put your hand up for more lucrative positions
• Control your money, don't let it control you
• Spend less, so that you can save and invest more
• Continue to educate yourself about the financial options available to you
• Treat any mistakes as a learning experience.

Monique Message works in a centre of like minded professionals whose aim is to guide their clients by empowering them to take control of their lives through education in investing and financial advice during and after family break downs. She specialises in advising women who are going through this difficult time and helping them make important financial decisions that can impact their future well being. PetersMcKeown Pty Ltd 9939 6758. Email This e-mail address is being protected from spambots. You need JavaScript enabled to view it