My Budget Says One Thing. My Checkbook Says Another.

If you have ever wondered where does my money go every month as I thought I created a budget already? Then this is a quick article worth reading!

Here is a suggestion. Get out a blank sheet of paper and write down all of your expenses separating them into two columns, fixed expenses and variable expenses. Then write out your monthly income. Most likely you will have an income short fall, where you expenses exceed your income (otherwise you probably wouldn’t be reading this). However, if you still find yourself over budget every month yet when doing this exercise your expenses are still less than your income, then you have your answer. Your income is being eaten up by unplanned emergencies, or impulse purchases, both of which are hard to predict, and both will ruin your budget.

Now create a category called “everything else” and give it a set dollar amount. This category is for those unpredictable expenses and most likely those fun impulse buys. What we are doing here is assigning every dollar a destination. Then if you exceed that assigned budget, that means no more impulse buying.

The key to all of this is to make sure every dollar coming INTO your account has an assigned OUTGOING destination. That destination could be charity, savings, fixed or variable expenses.

Action Steps: Now got to MINT.COM and create the budget, and link up your accounts so that you will be notified if you are about to go over budget in one category or another.

You are on your way!

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