How can I make my budget work for me?

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What is a budget?

A budget is a document that lists what your income is every month, and what you spend you money on every month. It can be done on a piece of paper, or on a computer.

Once you have created your Budget, you will realize that there are only two ways to increase your cash flow each month.

Method #1: Increase your income

Method #2: Reduce your expenses

How can I increase my income?

There are many ways to increase your income; consider some of the following suggestions:

	Work more overtime
	Get a second job
	Start a home-based business
	Take in a boarder or room-mate
	Try to find a better paying job

Remember to always consider the consequences when you try to increase your income. More overtime may mean less family time which, in the long-run, may not help you at all.

How can I reduce my expenses?

For most people, reducing expenses is a more immediate way to increase their cash flow than increasing your income.

Start by looking at every item on your Budget that you spend money on each month. Can any of those items be reduced?

Here are some suggestions:

	Consider ways to reduce your housing costs, such as moving to a smaller house or apartment or taking in a border or roommate.
	Look at all of your non-essential expenditures, such as cigarettes and alcohol. By quitting smoking or reducing the amount you drink, you can free up a lot of cash each month.
	Look at how much you spend on credit cards; pay off high interest balances first.
	Consider buying a coffee maker and a travel mug, and making your own coffee each morning, instead of buying it.

By looking at everything you spend money on, you can probably find ways to reduce your expenses each month.

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