If the Government Can Do It...

The first question to ask yourself is whether you need to budget. If your income covers your expenses - which should include saving if you need to save - then perhaps there's no need for a formal plan.

Make sure, though, that you are in the habit of saving to buy expensive items, such as cars or travel. If you save before buying, rather than putting it on a credit card, you will be thousands of dollars better off over your lifetime.

If you are not that well organised, or if you have debt of any kind, budgeting to some degree can make a big difference to your total wealth.

There are two levels of budgeting. The first is to simply ask yourself as you spend money over several weeks: "Did I really need or want that?"
Identifying unnecessary spending and reducing it might make all the difference.

The second level is to write a list, estimating how much you spend in different categories, such as food, clothing, transport and so on. Then check that against your actual spending - either by noting what you buy as you go or by going over bank statements, credit card statements, cheque butts and so on. Wherever your actual spending is higher than your estimate is probably a good place to cut back.

Two thoughts that might make spending reductions easier:

· Experts say that , to change a habit, you need to do the new thing daily
for just a month. It's easier to aim at 30 days than "forever".

· If you cut spending on something that is bad for your health - such as
smoking or drinking too much or eating fatty food - you are killing two birds with one stone. The virtue you will feel should give you extra impetus.

You might also find it helpful to set goals. The following are tips on goal
setting:

· Make your goals specific. For example, plan to pay off your credit card
debt in a year, or save $10,000 in three years to buy a new car.

· Break down your goals into smaller chunks. With the credit card debt, that
might mean monthly repayments that start at $100 and grow by $50 a month.

· Involve others. A relative or friend can help you to be realistic. And
discussing your plan may help you stick to it.

· Write your goals down, and mark your diary or calendar to check your
progress.

Don't be too hard on yourself. Include a few treats. And, if you miss your target one month, don't try to make it up next month unless that's easy. If you often miss the steps towards a goal, perhaps you should modify it.

And be flexible. Circumstances change. Only you will know if you are being realistic in adjusting a goal or you're just finding excuses. If it's the latter, think about whom you are cheating.

Just a minute. I said I wouldn't get preachy. Time for a quote from poet Robert Frost: "Nobody was ever meant to remember or invent what he did with every cent."