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Now that you’ve explored your spending habits and determined exactly where your money is going be it day-to-day, on a monthly basis, or periodically throughout the year, it’s time to tally up how much money you have coming in. Record your total income as a monthly amount. Be sure to include ALL sources of income.

Once you’ve came of with a monthly total of your income and your “outgo”, it’s time to see where you stand. If the end result shows that your income is more than your “outgo” then you’re off to a good start. Later we’ll talk about how you can prioritize the excess to areas of your finances such as savings or paying off debts. If you end up with more “outgo” than you do income, don’t fret. Just be open to making some changes and adamant about changing your situation.

Now, while it might not sound like the most exciting thing to do, here is where you will create your personal budget. Now for those of you that just freaked out by the mere mention of the word budget…take a deep breath and relax. Take a moment to remind yourself what this is really about. It’s about making ends meet and reaching your financial goals like simply making it to your next paycheck, buying a home, or starting a business. If you’re in it to win it…it won’t be that bad! It’s not a punishment! It’s a stepping stone!

Still not convinced? Then think about it like this…If your outgo is more than your income…then your upkeep will be your downfall!

Now there’s a thought to ponder! Think about it and stay tuned for Your Money & You: Creating a Personal Budget.