Now on to the topic for Week 2:

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Setting Up a Budget
This week's Activities for Success:
1. Tell your friends about your Personal Finance Resolution
2. Fill out the Monthly Budget Calculator
3. Reduce or eliminate one monthly expense

Most people have only a vague idea of where their money goes, but they generally find that it doesn't go as far as they think it should. The solution is to create and maintain a budget, which is an itemized description of income and expenses. This will enable you to determine how you spend your money, get more out of the money you have and make it easier to reach any financial goals that you set for yourself. Having examined your overall financial situation last week, you should have a good idea of where you are financially. Making a budget is the next step in mastering your personal finances.

Let's start off today by going over what you'll need to know in order to make your budget.
- Monthly household income
- Monthly expenses (broken down)
- Monthly contributions to retirement/ savings plans

Once you know these numbers, visit the Monthly Budget Calculator below and enter them into the spreadsheet. You'll be able to print your results at the end.

After completing this Monthly Budget Calculator, you should have a better idea of where your money is going each month. Most people don't realize how much they spend every month on incidentals such as subscriptions and eating out. As an Activity for Success this week, try to eliminate or reduce one of your monthly expenses. Here are a few ideas:

- Get rid of that satellite radio or streaming video subscription that you never use - Eat out one or two times less per month - Reduce or eliminate your cable TV package - Make your morning coffee at home rather than spending $4 each day If you can manage to eliminate just $100 from your monthly expenses and use that money to fund a retirement account, it will be worth over $100,000 in 30 years! (assuming an average 8% annual return). But we're getting ahead of ourselves... next week's issue will cover Establishing Realistic Financial Goals, and we'll touch on the different options that you have for saving and growing that extra money.      

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