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More and more people are trying to create a budget to live by these days with the state of the economy. However, many people have never creating a budget before and are doing so for the first time. When you are creating a budget there are three common mistakes that you will want to avoid and they are listed below. _ Mistake _ Not Knowing Exactly What You Spend in Each Category _ It is extremely difficult to create a working budget if you first don't know how much you typically spend in each expense category. This is why it is very important to track your spending for 30 days before creating a monthly budget. You will be surprised by how much you actually spend in each expense area.

Now we have reached the make adjustments phase, subtract your expenses from your income and if you have some money left over at the end of the month you have got yourself a budget. Realistically most people will not have a workable budget at this point, again it's not really your fault if you don't have a budget, because nobody ever took the time to show you how to set up a budget, much less help you stay on a budget. It doesn't take a rocket scientist at this point to figure out that you should reduce your nonessential spending habits and that's what they usually are is habits, they are your wants, not your needs. Pare your expenses down so you have some money left over at the end of the month and you now have your first monthly budget.

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