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By: Dan Cavalli Money & Business Strategist

In its most simplistic form, a budget outlines the expenses that you expect to pay in the future. Budgets normally cover a one-month period, but yearly budgets are not uncommon.

For the purpose of this article, we will focus on monthly budgets because they can be updated and adapted continuously to meet your changing financial needs. Do you need money making ideas? Go here

Before you can create a realistic budget, you need to analyze your cash flow. Filling out a cash-flow worksheet is a great way to figure out where you are spending money. However, you should be less concerned at this point about what you have spent in the past and ready to create a plan for future spending.

A cash flow worksheet will help you determine what you spend currently and give you an idea of what expenses can be eliminated from your budget and those that have to remain.

The first section of your budget will include all of your income including money earned from work, alimony, child support, disability, student loans, etc. Include all of the money that you receive on a regular basis. If certain forms of income are sporadic or unreliable, do not include them.

For example: If you only receive child support here and there, remove it from your budget. It would be risky to set up a budget using income that may never come in as planned. If your job is insecure, you may wish to make adjustments here as well.

On a separate sheet of paper, write down realistic goals. If you wish to create a savings account and have X amount of money in savings by a certain date, write down the goal and break it down into monthly allotments. Getting out of debt is never difficult. Find out here

If you wish to have $2,000 in savings in four months, you will need to include $200 for savings in your monthly budget. Include all of your goals here and break them down into monthly financial goals.

Create a rough budget outline by writing down all of your monthly expenses, including goals, and subtracting them from your income. If you have plenty of money left over, you’re in good shape.

If you’re like most, however, things will look a little tight. If your budget seems impossible, do not worry. A few simple changes can make your budget more realistic.

Analyze your expenses. Study your cash flow worksheet in order to determine if there are any areas where you can save money. Some of the best areas to save money include shopping, entertainment, vacations, clothing, and personal expenditures and so on.

Once you have trimmed all of the expenses you can, things should look better. If not, you may need to adjust your goals a little. You may need to push back deadlines to make your goals more achievable.

For instance: Giving yourself an extra four months to obtain $2,000 in savings lowers your monthly budget by $100. Keep in mind that your budget is not written in stone. You are allowed to make adjustments when the need arises.

You can use all these strategies to make money, reduce debt and improve your life but it means nothing unless you can earn money without having to work.

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About Dan Cavalli He learned financial fitness firsthand. In 1995, he started his first national business with nothing, but grew it to more than 35,000 customers and $140 million in revenue in less than 18 months. “The Financial Review,“ Australia's leading business newspaper named Cavalli as one of the country's “Internet’s Untold Millionaires.“ More recently, Cavalli's mission has shifted to helping others achieve similar success. He is the author of the internationally sold financial book, "Blueprint for Making Millions."

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