Establishing your own personalized budget or CORE plan allows you to take charge of your future, rather than following the advice of bankers and advisors who simply put your future on auto pilot.  Check out the Trackers  (Cash Tracker & Finance Tracker) to help you isolate unnecessary expenditures and find the funds needed to eliminate your debt.

The primary reason for creating you own personal budget is to be able to live within your means and save every month.  Here are the main issues you want to address when creating your budget.

Step 1: Debt Elimination – all consumer debt must be paid on a monthly basis with no balances carried month-over-month.  This will include lines of credit, credit cards, personal loans, furniture loans, etc.

Step 2: Match your amortization on your mortgage(s) to the years left until you retire.  For example, if you are 45 years old and you wish to retire at 60 years old, your mortgage amortization should not exceed 15 years.  All debt, especially large debt like a mortgage, must have an end date (by retirement).

Step 3: Setup your own Cash Journal on Excel or in a personal journal to monitor the debts and credits to your bank accounts.

Step 4: Determine your TDS Ratio (Total Debt Service Ratio) and never exceed 40%.

Step 5: Explore ways to increase your overall wealth by investing in appreciating assets.

Christine’s Tip:

Making your own personal budget is so important.  It sets spending limits, reduces unnecessary costs, helps you spend more and most of all shows you how to live within your means.  Budgeting over time will ensure you have more money for the important things in your life and you will feel empowered to be in control of your finances.