Tip #1: Think positively about your money. Money, and budgets, are not bad things. In fact money is wonderful! Money enables you to have a wonderful roof over your head, to wear the clothes that help you tell the world who you are and what you're about. Money buys education opportunities, cultural experiences, and money enables you to help others in need. You certainly wouldn't think money was bad if you were giving it to Katrina victims or the parents of a child with a debilitating disease. So that's the first tip to creating a budget, think positively about your money.



Tip #2: List the categories that you live by. If eating out is a major part of your life then you'll want to have a dining out category. If after-school activities are a large part of your child's life and your family expenses then that is a category for your budget. Many budget forms have categories that won't make sense for your lifestyle. If you want to create a budget that you can live by, that is easy to use and easy to follow, create categories that make sense to you and your family.

Tip #3: Be realistic about your income. This is more difficult for self-employed individuals, commission based sales people or business owners, because business fluctuates. For regularly employed people with a regular and predictable pay check, your budget should reflect your current pay check after taxes.

For folks dealing with unpredictable income, take a look at the minimum you've made over the past 5 years and base your budget on that income. This way, all your financial bases are covered. If you use the highest income you've made in the past 5 years then there may be months when you make less and your budget won't work. The good news is that when you use your minimum average income you will often have extra money. Plan how you'll use this extra money so it doesn't get fettered away.

Tip #4: Set realistic financial goals. Budgeting isn't about tracking your costs and going without. It's about setting and attaining your financial goals. It's about success, not failure. Before you sit down to create a budget, take a few minutes to evaluate and document your financial goals. Do you want to save for a vacation? For college? For retirement? For a new car? What are your goals? Without goals, a budget is nothing more than a detailed checkbook register.

Tip #5: Plan for fun. If your budget, and categories, are all about financial burdens, a budget will be painful to create and more painful to live by. Make time, and financial room, for fun in your life. If you love going to the movies, create a budget category for going to the movies once a month. If you absolutely love skiing or taking your children to the zoo then fit that fun time into your budget.

If you want your budget to be something that is easy to create and even easier to follow, follow these five tips. Making a budget doesn't have to be a chore, in fact it can be tremendously empowering. Have fun with it!