Posted March 18, 2009 by Adam Toren in Blogs

How to Develop a Smart Budget

katie-in-tealAs the “consumer crunch” continues in tough economic times, many people are revising their personal and family budgets.

Before you draw up a budget there are two common mistakes to avoid, according to Smart Cookies’ Katie Dunsworth. She is one of the local women featured on Oprah for their moneysaving ways whose appearance led to a television show and book. Katie’s moneysaving tactics helped her pay for her wedding in cash-all $22,000 of it. She says people making budgets these days are frustrated, maxed out and putting a budget together as a form of control. “Instead of reflecting actual spending and living costs, many budgets are just general ‘guestimates’ of spending,” Dunsworth says. “Bottom line, whatever you think you’re spending on everyday purchases, double that number and you are probably closer to your actual spending.”

Dunsworth says the second biggest mistake about budgets is they are not used on a regular basis. “The Smart Cookies group first formed as a money club in 2006, and without the constant analysis of our spending and the discussion of how to change our spending habits and find more money, we would be just like anyone else with a sad little spreadsheet,” she says.

Most financial analysts agree that 2009 is a year that will make or break you financially and the time to get started is now.

Dunsworth outlines three top ways of budgeting to get what you want and save money:

shutterstock_245025791. The “Perfect Day” Exercise – Think about what your perfect day would include, and how you could start to put aside money now to make it possible.

2.  Create a vision board – Create a vision board with images of the things you would rather spend your money on. For example, Katie has a sewing machine and a picture of a cottage because she is saving for a vacation property and is learning how to sew. Every time she goes to buy something she’s reminded to ask herself, “Do I need to buy this magazine or would I rather put that money towards my summer home on the lake?”

3. Go online for help – Smartcookies.com has six steps from creating your perfect day to developing a working budget you can check in on each day. On this site you can enter your numbers daily, weekly or monthly, set visual goals for yourself, and even connect with people in your area who are looking for money club members.

Tune in Monday night at 10:30 PST/EST for Smart Cookies on W Network.

Adam Toren

Adam Toren
Adam Toren is born and raised in Vancouver BC and loves everything Vancouver BC has to offer. He loves traveling and exploring new and unique restaurants and places around the world.