The United States is in financial trouble. Citizens are bewildered how their elected officials just can’t seem to spend within a budget. And yet, this is a problem that a majority of Americans have. If we cannot even keep a personal budget, can we expect our country to stay on budget?

In order to better our lives and our country, we need to make an inward change before taking that change outward. The first step is going to be budgeting.

Budgeting is a word that is often accompanied with stress, anxiety and general distaste. Let’s face it: budgeting takes work. A lot of work. It also requires restraint and self control, which many people do not like to use. But while budgeting is a pain, it is the first step to financial health.

The first and most important step to budgeting is to find out what you spend every month. Keep a detailed record of what you spend, how much you spend and where you spend your money for a month or two. Make sure to keep mind of cash spending as well. You can use bank statements to help you manage your transactions, or you can set up an account at, a financial website that helps you track and manage your spending.

Are you surprised with how much you spend each month? It is amazing to see how much little purchases like treats at the gas station or eating out adds up.

Once you have tracked your spending, check how much money you bring in each month. Your spending should be less than the amount you bring in. If not, you are in big trouble. Either way, you need to start setting budgets.

To set budgets, make a list every everything you MUST spend money on every month. This would include house payment or rent, utilities, car payment, groceries, gas or transportation, personal supplies like toilet paper. Put a spending limit on each category. Next, add in budgets for discretionary items like entertainment, clothing, etc. The total amount of your budgets should NEVER exceed what you make.

So, that is it. Don’t spend more money than you make. Simple and easy, right? Spending within your means is a difficult task for many people. With the ease and access of credit cards and the need for instant gratification, it is easier said than done.

Many people have found success in the Dave Ramsey cash envelope system. It is something like this: for each budget you create an envelope. At the beginning of the month, you withdraw the cash from your bank and put in respective envelopes. As you begin to spend, you would take money out of the corresponding envelope. If you run out of money, you either don’t make that purchase or you have to take money from another envelope. The idea is simple: if you do not have the money, you cannot purchase it.

Whatever system you use, creating and sticking to a budget is the only way to a better financial life.


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