financial independence

Anyone who desires a brighter financial future
must make sure to live in the financial present. This requires the
creation of, and adherence to, a budget. This simple yet critical step
to financial freedom is often ignored. Many people feel it is overly
complicated; or they believe themselves thrifty enough that creating a
working budget is unnecessary. The fact is that very few of us do not
need improvement with financial planning; most of us would be surprised
- even shocked - to see exactly where our money goes.

Building Your Budget

Open up your favorite spreadsheet program. The top row of your budget
will be your monthly income. If your income varies from month to month,
use a low estimate, so that you have a cushion.
Under your income, put in each of the categories you created. Each
expenditure should be subtracted from your monthly income. Refer to the
"Help" button on your spreadsheet program if you are unfamiliar with
how to do this - don't worry, it is very easy. The last line will be
the overage or shortage of money for that month.

Optimizing Your Budget

If you end up with a negative number at the bottom of your budget
spreadsheet, you are spending more than you are making. Seeing that,
you may be tempted to run to the phone to call a financial planner; but
that costs money, which you do not have. You can very likely fix your
financial problems yourself. Save the money.
Review each spending category and determine where you can make cuts.
Create a new column on your spreadsheet. Enter in your goals for next
month's spending - be aggressive, you are striving for financial
freedom. Keep adjusting until the bottom number is positive.
The next step is one that cannot be skipped or taken lightly. At the
end of that first budgeted month, compare your actual spending to the
numbers you set as your goals. Do this with every single category for
the first two or three months. By then, you will know which areas need
work, and you can focus more on them.

Budget Success

If you can get to the point where there is always a positive number at
the bottom line, you will experience the sensation of "budget elation."
Resist the temptation to spend the extra money on a party to celebrate
your frugality. Do not buy a self-congratulatory flat screen TV. Feel
free to pat yourself on the back, though. The extra money should be
saved or invested. Save for a dream vacation or for your kids'
education, without worrying where your next meal will come from. Invest
for your retirement or start your own business. Financial freedom will
come if you make your money work for you. The world will be your oyster
soon enough, as long as you remember:
Pay Yourself First!