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4 Tips for Creating a Solid Budget

If you knew of a tool that could bring your mind, family, and finances into harmony, dramatically reduce stress, and make the challenges of life much more manageable, would you take advantage of this tool?

Such a tool does exist. A budget allows you to take control of your finances, instead of your finances controlling you.

You can create a budget that supports your dreams while making sure the necessities are taken care of.

Simply follow these steps to experience peace of mind and excitement about your future:

1. Find the starting line.

The first crucial step in creating a household budget that works is to list all of your income and keep track of every dime you spend for a month. Before you can know where you're going, you have to know your starting point.

You'll be surprised to learn where your money goes each month. This awareness alone may change your spending habits for the better.

2. Use credit wisely and sparingly.

In college, using credit cards can seem like no big deal. Credit card issuers often give special deals and incentives to lure college students into applying for credit they don't need. With large spending limits and small incomes, credit cards tempted you to live a lifestyle you can't afford.

Credit, used properly, can provide convenience and peace of mind in knowing that you're covered in the case of an emergency. But the temptation is great to live outside of your means and worry about paying for those purchases later. The fewer credit cards you sign up for, the less you'll be tempted to spend away your future financial health.

3. Keep your checkbook balanced.

One of the simplest and most productive habits you can incorporate into your personal financial success plan is to maintain a balanced checkbook. Keep track of everything that goes in and out of your account by writing it in your check register or in a spreadsheet. At the end of the month, compare your checkbook to your bank statement.

When you're keeping track of what you spend, you may feel less tempted to waste money on impulse purchases. You'll always know when the money is almost out. This can save you a lot of money on overdraft fees and a lot of headaches.

4. Reduce expenses.

There's no secret to a successful budget. It's as simple as keeping track of your income and expenses, increasing your income or lowering your expenses until you spend less than you earn, while also saving for a rainy day. 

Once you have a good grasp on what you're spending and where, find places to cut back and put the money you save into a savings account for a rainy day. Clip coupons and look for grocery sales. Turn off the lights when you leave the room. Turn the air conditioner off when you leave the house. And cook ahead of time to save on the expense of eating out.

Financial pressures can make all of life seem overwhelming at times. If you implement these simple steps and commit to maintaining a rock solid budget for your family, you'll experience financial peace and prosperity and will be able to put your money into investments. Beyond that, however, every area of your life will improve as you're more relaxed and at ease with the peace of mind you've achieved.