Wednesday, April 9, 2008


Have you tried sticking to a budget and failed?

Then you may be using a method which is too complicated to follow. Some budgets ask you to note down all your expenses every day. Others advise you to spend as little as possible, which makes it as palatable as a diet!

But budgeting need not be hard or torturous. Once you get the hang of it, I bet you'll even enjoy taking charge of your money. What you need to do is take control in a way that's comfortable for you.

We'll start with a method I've found very useful. Some people call this the 3S Plan. All the plan asks you to do is divide up your income into SAVE, SHARE and SPEND boxes.

Step 1: SAVE
This should be your first priority. Take your income -- your allowance plus any other money you get on a regular basis -- and put part of it into your SAVE "box". Decide on the amount before you get your allowance each week or month. This way, you won't be tempted to put less into your SAVE box once you get the money in your hands.

Start with an amount that's comfortable for you. For example, if you get $50 every week, you may want to start by setting aside 5% or $2.50 per week into your SAVE box. You may want to work up to 10 or 15% or more as time goes on.

Step 2: SHARE
If you have an income, setting aside even a small amount every month can go quite a way towards helping people who really need it. Again, start by putting an amount into your SHARE box that's comfortable for you, and work up as you adjust your spending.

Step 3: SPEND
Put the rest of your income into your SPEND box.

If you get $50 every week,
and decide to save 5% and share 5%,
this is what your three boxes will have
at the beginning of each week:
SAVE: $2.50 per week
SHARE: $2.50 per week
SPEND: $45.00

In my next blogs, I will discuss what you can do with the money in each of the three boxes.

So, look out for the next part where I will talk about the SPEND box and how you can make sure that you have enough money for everything that you need.

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