How do you create a realistic budget?

step 1, analyze all your receipts, bank statements, and credit card bills from a month period
2 – determine what expenses are necessary (rent, utilities, car payments, groceries)
3 – subtract what you need to pay for from your expected after-tax income
4— the rest is discretionary – if you like to shoe shop, set asside how ever much of your discretionary income you want to spend on shoes, and use no more than a quarter of that every week on shoes

Start by recording everything you spend for one month. Create a set of categories: Food, Rent or Mortgage, Utilities, Health Care, Entertainment, Clothing, Auto or Transportation, Savings, etc.

Once you have that, then you can look at where you are spending and consider cuts. If you are not saving, set aside something for that first!

One way to pay off debt is to put a moratorium on a lot of your unnecessary spending for some period. For example, you can say: “For three months, I am not going to buy any new clothes, shoes, purses, DVDs or CDs.”

Great thanks

Carla, I have had to cut back very severely once or twice (and am gearing up for it again). The way I do it is to use percentages (I use a spreadsheet for this). So, when I get my paycheck, the spreadsheet tells me how much I should set aside for each item (e.g. long term debt, short term debt, bills, groceries etc.). You can also try using Mint which will analyze where you stand today.

This might sound silly, but I looked around my home and dumped whatever I hadnt used in a while. Dumping it on ebay/cl gave me some extra cash that I used to send down an extra payment to long term debt—that made me feel great because you cant get better return on your money. E.g. if you bought something for $100 and now its worth only $10, send that money to your mortgage, and over a few years, that $10 will save you a LOT! (you can do the math)—that way, you wont feel like you lost money on whatever youre having to sell.

Most importantly, keep reaching out to others like you just did. A kind word on Fluther goes a very long way for me—I am sure it does for you too.

Dr/Marina/Athar nailed it, and spreadsheets really help.

Consider becoming very familiar with your online bank account, too. Electronic bill-pay scheduling is a very helpful tool for the semi-scatterbrained. <Me