NEW YORK (AP) -- Just the thought of preparing a family budget strikes terror in the hearts of many people.
But taking the time to put your finances on paper (or a computer) can help you determine how you're spending your money and where you can make adjustments so you can increase your savings.
''Everyone, from the wealthiest to the poorest, need a budget,'' says Bambi Holzer, a senior vice president for investments at PaineWebber in Los Angeles. ''Not having one is like not having a map to get you where you're going.''
The object, in most cases, is to maximize savings -- whether for short-term goals like buying a new car or long-term necessities such as paying college tuition or funding a comfortable retirement.
''It's much easier if you have a goal in mind, whether buying a condo in Aspen or taking the trip you've always wanted across Europe,'' said Holzer, the author of ''Set for Life: Financial Peace for People Over 50'' and ''Retire Rich: The Baby Boomer's Guide to a Secure Future.''
''When you have a goal, sticking to a budget isn't about sacrificing but about planning for something wonderful.''
And you don't have to abandon your budget in frustration if you slip and overspend once in a while.
''If you're on a diet and you eat some chocolate, well, you just work out harder the next week,'' Holzer said. So it goes with budgeting.
Bill Heath, a former pro baseball catcher who now is president of Barrington Financial Advisors in Houston, believes ''budget'' has become such a negative term that it's best ''to take a positive approach and talk about a spending plan.''
That plan is something that should be worked out with all members of the family so that everyone has a commitment to make it work, he said.
''People who end up financially successful do two things religiously,'' Heath said. ''They have a financial plan in writing, with goals and objectives. And they save 10 percent of their income.''
Of course, it doesn't make sense to try to save money if you're overburdened with high-interest credit card debt. You have to work that down first. And you should set aside in an accessible savings account the equivalent of at least three months of income for emergencies.
''You can make the savings part easier by having 10 percent taken out automatically from your checking account and deposited, preferably into a mutual fund, a balanced fund,'' Heath said.
So how do you get to that point?
First you have to add up all your income, which includes your wages, alimony or child support payments, pension and Social Security checks. Then you need to subtract your expenses.
For expenses, financial writer Marshall Loeb suggests in his newly published ''52 Weeks to Financial Fitness'' that you gather every record of expenses you can find: your checkbook, your credit card bills, last year's tax return, and receipts you saved from cash purchases.
Break them down by ''fixed'' expenses such as mortgage or rent payments and child care costs, and ''variable'' expenses such as food at home and in restaurants, clothing, transportation, entertainment and charitable giving.
Now you need to get the income and expenses to balance.
Loeb suggests you allocate no more than 65 percent of your take-home pay for regular monthly expenses. An additional 20 percent should cover occasional outlays, such as clothes and recreation, while 10 percent should cover ''interval'' payments for insurance policies or property taxes. That leaves the last 5 percent -- or more, if possible -- for savings.
There are a number of tools, both online and off, to help you put your own spending plan together.
Intuit's Quicken and Microsoft's Money software programs both have extensive budgeting tools.
There's an ''instant budget maker'' in the Money 101 lessons at www.money.com. You plug in your annual income, and the program gives you a chart showing how others spend their money on housing, clothing, entertainment and the like. You then can fill in your own spending estimates to see how closely they correlate.
Another good online budget maker can be found at the GE Center for Financial Learning, www.financiallearning.com.
Families who like to work with paper will be able to calculate net worth and outline a monthly budget with a government publication, ''The Consumer's Almanac.'' You can order the calendar (Item 348H) for 50 cents by calling 1-888-8-PUEBLO, or online at www.pueblo.gsa.gov or by writing the Consumer Information Center, Dept. 348H, Pueblo, Colo. 81009.
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