Color me Budget!

First things first, when it comes to budgeting you have to be aware of your finances. Being aware is the most significant part of budgeting before you can do anything else. You have to know how much you make, how much you spend on an average, and how much you plan to put away. Budgeting is keeping track of your income and expenses, and knowing how much money is coming and going. You will need to get a well thought out plan in place, set up some realistic and attainable goals, this of course will differ from individual to individual based on one's income. For budgeting to be effective, you need to identify all your expenses so that you have an accurate view of how you're spending your money. Divide you expenses into four categories: housing, work, living and personal. After listing your monthly expenses for each category, you can then determine which are more discretionary in nature. Your discretionary expenses, which are more likely to be found in the living and personal categories, should provide the greatest opportunities for making spending cuts.

One major benefit of preparing a budget is that it forces you to examine your spending habits so that you can make necessary corrections. If you think you will have difficulty controlling your spending even after creating a budget, consider implementing the "10 percent solution" for saving money. Set aside 10 percent of each paycheck to devote to saving and investing. Start small and continue to add what's comfortable to that percentage of saving and before you know it you'll be saving and budgeting like a pro.