10 Tips for Smart Budget Planning ...

Just like a food diary, make a budget diary! Okay, so you know you’re going to write down your mortgage or rent, utilities, cell phone, cable, credit card payments, car payment, insurance, groceries, and petrol, but that’s not all! You also need to account for your other expenses, like haircuts, manicures, pedicures, oil changes, meals out, date nights, NetFlix, gym membership — everything. Look at your bank book and notice what recurring expenses you have that you might have forgotten. Write them all down!

When you’re making your budget plan, be sure to over-estimate a little on your expenses. For example, if your car payment is $234 a month, estimate it at $250, so there’s a little wiggle room, and so the math is easier. If you over-estimate your known expenses a little, then you’ll have a small built-in cushion in case an unexpected expense arises (say, a sale at Macy’s!).

While you’re at it, under-estimate your income a little bit, too. If you typically bring home $587 a week, round it down to $550. Again, this will give you a very small but handy cushion in case you need it. If you don’t use it, put it into your savings account, because you may need it later. While you may not notice the missing $37 each week, you’ll notice the extra $1900 that yousaved at the end of the year!

Make an expense entry of at least $50 each month for “unexpected expenses.” This will cover anything you’ve forgotten, like Grandma’s birthday flowers for Mother's Day, or when that super-cute guy from accounting finally asks you out. If you figure it into your budget, you’ll never be short of cash.

Make another entry for 10% of your income called “Savings.” I mean it! This is the Year of** Living Responsibly**. Your only good excuse for not saving is if you’re using all of your “extra” money to pay down credit cards debt. In this uncertain economy, having a small nest egg is a fantastic idea, and if you don’t end up needing the money you saved at the end of the month, you can always spend some of it or something special, like a piece of jewelry!

If you’ve ever written a check knowing you didn’t have the money in your checking account to cover it, but that you would by the time the check cleared, you’ve kited. Kiting may seem harmless, but it’s never a good idea, because if you misjudge the timing, you could bounce a check, which in turn could cause something else to bounce. It’s not only embarrassing, it’s expensive! Most banks charge outrageous fees for overdrafts, and that’s such a waste of money!

Don’t plan a budget you know you will never be able to keep. Just like a diet or an exercise program, try and be reasonable. If you’ve never been able to save well, or are a compulsive spender, don’t expect this to change overnight. Instead, make small changes, and take small steps, towards your overall budget goals.

If you have children, know that they are watching your spending and budget habits. If you spend more than you should, or live outside of your means using credit cards or kiting, they’ll learn these bad habits, too. But if you’re financially responsible, and thrifty, they’ll learn these good habits, and use them to be more successful, and less stressed, in their own adult lives.

Once you’ve completed your budget, keep a copy of it handy. Keep it in your bankbook, planner, or pocketbook. When you’re planning to spend a large sum of money or an item, pull it out and see if you can afford it, or absorb it into another few months. See where you can make small cuts to afford it, for example, cutting back on other discretionary spending, like your mani/pedis or 17 Most Stylish Pairs of Cutout Shoes ... @ave fund.

Every few months, review your budget and make updates or changes according to how you’ve actually been spending. If you changed cell phone plans, and are now paying a lot more or less, update your budget to reflect that. If you notice you’re spending more on shoes or clothes, increase that part of your budget, but be sure to take it from somewhere else, like meals out or date nights. Think of your budget as a scale, where the two sides ought to be equal. If you take something away from income, take something away from spending, too.

If you keep these ten tips in mind, you’ll be able to come up with a budget plan that’s ideal for you. You should even be able to save! Do you have any tips on making (and sticking to!) a smart budget? Please let me know!