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Tip 1

Save - Start on the right path by learning how to spend less than you make.
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Tip 2

Pay Yourself First - take an amount out of each paycheck and put it in a savings account.
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Tip 3

Big Purchases - save the money first to avoid credit card debt.
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Make A Budget


Life has many Surprises; don't let your finance be one. Make a Budget.

Making a budget is easy.

First you have to learn your spending habits. Keep track by hand of all your monthly obligations and additional spending rituals. You can also use SaVonk's Spending Tool to track all of your spending where and how you spend your money.

What you have to pay each month in bills is the most important. These values have higher importance than what you spend daily, say on your Starbucks run. These big expenses are like rent, groceries, car note and similar obligations. However the little daily things like a cup of coffee or a sandwich at lunch from the local deli add up, so keep a record of those as well.

Once you know where you money is going, lets calculate where your money comes from.

You can get paid 2 ways hourly or salaried. Now, expenses regardless of the way you get paid are due every month, right? So, if your hourly and you work say, 40 hours a week time that by 4, therefore you work about 160 hours a month and get paid for that each month. If you are salaried divide your salary by 12 to get your monthly pay. Now that we have income by month let's find what you actually take home, Companies take out for things like social security and Medicare. These have to be taken out or you will end up pay a lot more later on in taxes.

So here's what you do:

Take your monthly pay times 6.5% for social Security and hold that number.

Then take your monthly pay times 1.45% for Medicare and hold that number.

Subtract the two numbers you just calculated from your monthly income. This is what you are actually taking home each month.

Remember though, this number is still an estimate, it doesn't include any state taxes that are taken out or other withholding you may have selected.

Now, you have your real pay, your expense and with one more item you will be ready to make your budget.

Like all your expenses you are entitled to a piece of your earnings, so select a value that you want to save each month for a rainy day.

Now you are ready to make a budget.

Clean sheet:

At the top write Monthly Budget, on the next line write income and across from it write how much you make.

Skip a line or two and write savings and its value across from the word under the income value.

Skip another line and write expenses. Beneath expenses list out all your obligations and the values associated with all of them. Make sure to add buffer accounts for entertainment, emergency and other. These additional accounts will help you manage if a wedding or birthday party pops up or if you are out with friends. It allows for spontaneity without going bankrupt.

Add up your expenses and write this beneath all the expenses in a different color or in bold.

Then subtract: Income-saving-total expenses= Free cash
Free Cash is the money you have left over after all your obligations are taken care of. Another term is discretionary income. This is money you can add to savings or use for something else. You can allocate it to another expense account or literally hide it in your back for a cushion.

Once you have your budget, try to maintain it for a good 6 months. Don't make any changes to it. Try just to keep everything in about the same ballpark, after 6 months you can make whatever changes you deem necessary. If you see that over the last few months you have been going over on your utilities bill, increase that category and adjust others to maintain a positive balance. If you see that instead you are spending less on say groceries each month you can reduce that category and add more buffers to other categories.

With budget its best to hit it or be below. When you start to exceed the budget limits you set, your spending has gotten out of whack. So, Make your Budget! Good Luck!