Funny isn't it, everybody would like to save money, but the idea of creating and living off a budget seems deplorable! The idea of creating a budget just seems nerdy and boring, not to mention embarrassing. I mean, who likes admitting to their friends they can't go out to dinner because it is not in their budget? Well, I have some great news - you can budget and still enjoy life!

Even when I was younger I couldn't understand when some of my friends couldn't go out because they had to pay their car insurance or registration that week. I mean really, when we were younger the only expenses we had were for our cars and having fun! Unless they were living under a rock they knew that at some point in the year they had to pay these things. So, unless you have absolutely no idea what expenses may be coming up in the future, you really shouldn't have any excuse for not being able to pay it without suffering any duress.

The best advise I can ever offer anyone when it comes to saving is simply planning ahead! What I would like you to do is spend a couple of minutes simply adding up how much you know you spend throughout the year and breaking this down into weekly costs. I suggest you be as accurate as you can and list every expense that you can possibly imagine, eg Birthdays, holidays, groceries, etc! Once you have done that, figure out exactly what you bring home every week (for some of you this may have to be an average), but make sure that it is what you actually bring home, eg, after tax.

Now lets hope that what you earn exceeds how much you need to spend every week! If it doesn't, you really need to look at your expenses and make some drastic changes, otherwise I am sorry to say, but you will never be able to get on top of your bills. For the rest of us that earn more than our weekly expenses there is great news - you can start budgeting right now!

Ok, lets assume your weekly expenses equate to $600 and your weekly income is $700. Great, by simple mathematics you should be able to save $100 per week, that is $5200 per year. Now the reality is, most of us probably couldn't save that much in a year, even though we should easily be able to do it. Why is that? Simple, poor budgeting skills!

In my opinion we spend to make us happy. Lets face it, we all love a bit of retail therapy and we all desire newer items. So what happens when we have managed to save a few hundred dollars (or thousands)? We tend to think "well I think I can spoil myself with some new clothes", etc. And this is where we get ourselves into trouble! Oops, the electricity bill is due, or the insurance, etc. So now we have to make sure we have enough money to pay for that, which in a lot of cases means you don't go out for a couple of weeks, or you put it on your credit card, or you need to ask for an extension.

So, what can you do? A method that seems to work extremely well is simply making sure that you have at least two bank accounts. One for your expenses and the other simply for saving. You therefore put $100 in the savings account (and don't touch this for at least a year!) and leave the $600 in the bank.Now, the trick is to try and make sure that you never touch the savings account and live entirely off of your spending account. DO NOT be tempted to go on a spending spree when you see that your spending account has a couple of thousand dollars in it, because you are going to need this when a bill comes in. You need to also keep a list of where you are spending your money and make sure that it is in keeping with the original list you created. Eg, it is no use saying you have allocated $50 per week on recreation and you have been spending $65 per week You will either have to re-adjust your budget or simply tone down the recreational expenses.

I know a lot of you are probably saying, yeah this sounds ok in theory, but I cant start this week because I have my insurance to pay and that alone is worth over $600. Not to mention rent, etc. Stop making excuses - you have to find a way to start! Let us explore what you could do. A favorite of mine is paying as much as I can in monthly installments, eg insurances, rates, utility bills etc. Another is living off my credit card. I know credit cards are associated with bad debt and to avoid these at all costs - I strongly disagree with this. I have been using credit cards for about 15 years now, and have never paid a cent in interest! I make sure the card is paid every month - the trick is not to spend money you don't have or buy things you wouldn't normally buy!

Using a credit card when you are starting on your budget for the first time could in fact be your savior. Did you know that in a lot of cases you could have almost two months grace to pay off your credit card? This means you could leave all your money in your bank account (thus earning interest), until the credit card is due. If you were to put all your shopping, bills etc, on your credit card you will quickly start accumulating money in your spending account. It is always a good idea to make sure that your credit card account does not exceed what is in your savings account. So I repeat - do not go buying anything that you would not normally buy!! If you have been careful when your credit card is due you simply pay it all off with your spending account. You should have also have built up some savings by this time as well!

After a month re-evaluate your spending habits and make sure they fall in line with what you originally estimated. I never said budgeting was easy, so you need to work at it and make constant adjustments. Unfortunately most expenses tend to go up, so if you want to ensure you are meeting all your expenses and still save there is a need to constantly review your spending!

So in summary, you can avoid being left without any money so you can enjoy life if you follow the following tips. Plan ahead (most important). Carefully list all your expenses - and I mean everything. Make sure your income exceeds your planned expenses (otherwise make drastic measure to do so). Start from today - no excuses (organize a credit card if you haven't already got one). Constantly review and make sure that you are on track. And last but not least - do not kid yourself (eg, make sure your listed expenses are a true reflection of your expenses).

Good luck!!

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