Budget Planner

The most important thing you can do when it comes to a budget is become educated. Experience has shown that when your budget is intact, and functioning correctly, everything else takes care of itself (the bills are paid on time, retirement contributions are made, and unnecessary debt is eliminated). You Need A Budget (YNAB) Rocks! In a truly frightening kind of "I spend that much money on THAT!" way but in a great way because you can see the impact of your daily coffee habit on your car insurance payment 6 months away.

The heart of the YNAB system is a "buffer" which is comprised of last month's paychecks in order to allow you to save this month's paychecks. So the buffer is one full month's income. So I'm earning May's income and it is just pouring into my checking and sitting there. Also sitting there is all of April's income. April's income is what I'm paying my current bills with. May is accruing. And I'm budgeting for June's expenses with an eye to leftover April income instead of instantly using May's income.

I earn a good living. Yet earlier this year, several months after buying a house and getting settled back into the swing of things I couldn't escape the notion that my family was living beyond its means.

And we were. And YNAB helped me see it.
The YNAB software will allow you to spend less time managing your finances than ever before. YNAB let's you import your transactions directly into the software from you bank - you don't have to spend time each week updating your financial software to match what your bank account already says. It allows you to make your own categories for things, track anything you want to, and even contains the tax forms you will need to fill out at the end of the year.

Now that you have an accurate picture of your financial situation in front of you, it's time to do the dirty work. What can you afford, and where do you have to make cuts? The first things that need to be taken into account when determining where your money goes each month are your "Needs". Once those are accounted for (including, if at all possible, paying into a savings account), you can start adding some of your "Wants" to the list prioritize these, as it's unlikely you'll be able to accommodate them all.

Once you have a budget worked out for yourself, make sure you keep it on hand a budget is useless if you don't use it. Update it often, and feel free to make changes and alterations if you need to.

Think of your budget as a fluid, living document. Your needs may change from month to month or quarter to quarter, and your budget should reflect that. Finally, don't get discouraged if you go over budget one month. Remember, it's a tool, a guideline. If you use it correctly, it will help you achieve long-term financial stability.

With YNAB you can track your spending and debt repayment over time, set goals, and do just about anything you can imagine to design your own budget. It is by far the cheapest, most sophisticated piece of financial software I have seen to date.

A lot of people have the wrong interpretation of the simple phrase "Pay yourself first". I've asked several people, and these are some of the things I've been told.

· After I pay my bills, and purchase the items I need, I then put something in the bank.

· I set aside a dollar a day. I deposit it at the end of the month.

· I have set up automatic monthly deductions from my bank account.

There is an inherent problem with using these methods to save. All too often, there's never anything left over to save. The best plan is a sure plan.

Answer the following questions. When does Uncle Sam get paid? When does the State get paid? When does Medicare and Health Insurance get paid? These deductions are made before you receive your check. They don't wait and neither should you. Money management begins when you have money to manage. Having money removed from your check before you receive your net pay is sound money management advice.

Payroll deduction's is the easiest way to "Pay Yourself First". Use your company's payroll deduction plan, if available, and arrange for a fixed amount to be taken out of your paycheck. Your employer will send these funds to an account of your choice before you receive your check.

The deposit choices for the automated payroll deductions are endless. Don't limit your savings to only a low interest bearing savings account or money market account at your local bank. You can have the monies deposited in various accounts set up for an IRA or college education, assuming you have researched and identified mutual funds that can fulfill those needs.

You will probably have to wait a year before you will be eligible to participate in your company's 401(k) plan. Each company's rules are different. Review company's 401k information and make sure you understand the requirements.

Having opened the saving account, you are now ready to save money. Tell your payroll department to deposit a minimum of 6% of your gross pay directly into that account. Since we tend to spend our take home pay, having a direct deposit will keep you from spending money not in your pocket and it will start a saving habit early.

Your company may give your FREE MONEY if you contribute to the 401(k) plan. Your company's 6% minimum contribution requirement won't be a problem for you, because you started saving early. Make sure you understand the company's rules.

This represents basic fundamental information you should know. Learn how to start the saving habit early so you can participate in your company's 401(k) plan the day you are eligible. Don't miss FREE MONEY because you are spending all of your take home pay.