1. Realistic, Written Goals.

Your budget feels like handcuffs when you aren't working toward anything in particular. If you are budgeting to budget, you won't get far. Set realistic goals and you'll find the key to financial freedom lies in your budget. When you are working toward something you truly want, you are more likely to cut spending, start saving, and using your money more wisely. Write your financial goals down. Financial goals of a successful budget could include:

• Down payment on a house.


• A new car.


• Getting out of debt.


• Saving for a comfortable retirement.


• A college education fund.


• Traveling the world.


• A dream vacation, etc.

2. A Tailored Fit.

Your budget is your own. Use your own categories to determine what your budget will be, not the categories of a program or the suggestions from your parents' budget. A successful budget is one that is tailored to fit you and your needs. You have your own spending habits and can determine what those are. Your neighbor may have a category for weekends at the lake while your entertainment budget would be poker nights with the boys. Tailor your budget to fit you.

3. Real, Accurate Income.

You can't make a budget without having an accurate knowledge of what your income really looks like. Don't estimate or guesstimate, or even hope. Just give yourself an accurate picture of what your income is so you can be accurate on how it will be spent.

4. A Line Item for Savings.

You must treat your savings as you would a bill. It is something you have to pay if you want to have financial independence. Pay it each month on a specific date as you would any other bill, and if you can, make it automatic so you don't even have to think about it.

5. The Odd Balls Accounted For.

You will make purchases throughout the year that can't really be included as a monthly purchase such as auto repairs, quarterly insurance payments, property taxes, etc. These purchases will be unique to you and your situation, but if you want financial independence through a successful budget, you have to add them in. Get a good picture of what these types of purchases will cost you in total throughout the year, then divide it by twelve to see how much of your budget each month is allocated toward the odd balls.

6. Cash Tracking.

Spending leaks are the number one budget killers and therefore the number one killer of your financial independence. Stop the spending leaks by tracking every penny as it comes in and where it goes out. If your income and expenses columns don't add up, there is a spending leak somewhere that will bleed away your financial independence. Stop the leak by micro-tracking where your money is going.