The planning process that results in a formal budget provides an opportunity for you to think through and commit future plans to writing. In addition, a properly prepared budget allows you to follow your family’s principles by devoting attention to results that deviate significantly from the plans. For all these reasons, a budget must clearly reflect the expected results that you envision.

Failing to budget because of the uncertainty of the future is a poor excuse for not budgeting. In fact, the less stable the conditions, the more necessary and desirable is budgeting, although the process becomes more difficult. Obviously, stable conditions permit greater reliance on past experience as a basis for budgeting.

If you have a goal of saving for retirement, education, a down payment on a home, a trip or for emergencies (which should absolutely be a goal), make sure you have included these goal-oriented savings in your budget. Simply figure out how much you need to save, when you need to save it by, and divide by the number of months you have left until that date. This will indicate how much you need to save each month. These types of savings are not meant to be touched until that event happens.

As you evaluate your income when planning, you will need to look not only at your annual salary but your net, or take home pay, which will determine what you have available to put toward your budget/expenses. Net pay is your gross income minus taxes and other automatic deductions from your paycheck.

Use your pay stubs to determine your net income. In addition to your regular income, be sure to include all forms of recurring income; consider whether you’ll receive a bonus and any other household income from a spouse, significant other, part-time employment, etc.

Now that you have determined your net annual income, determine your average monthly expenses and your average monthly income.

Net income is your total income after taxes, deductions, credits, and business operating expenses. There is a slightly different process for calculating your personal net income, and calculating your business net income. It involves looking through some records and doing a bit of math, but calculating your net income is simple once you know the process.

Living a responsible life and saving what you can = good. Starving yourself and living desperately = bad. Be realistic about your saving, both in what your target is and how you’re going to get there. Food, housing and health take up a serious chunk of your income. Set an attainable amount per month to achieve in small increments.

When you to create a good savings plan it is a road map to a better financial life. It’s important that if you create one you must follow it. Saving plans doesn’t have to be difficult, but it does require commitment. Start where you are, know how much money you can save monthly.

Pull together statements and monthly bills so you can be as accurate as possible. For any expenses that are variable like utilities, contact your local company and request budget billing. The reason behind this is to get a fixed cost on all expenses. If they do not have the program, ask them to give you your monthly average, then use the highest number as your fixed number each month. Once you put together the following information your personal journey begins.

Saving money thrives on consistency. It can be as easy as automatically transferring a set amount from your checking account to your savings account every week. Bit by bit, $25, $30 or $50 at a time is what makes it possible. Saving is about delayed gratification. Save now to Savor the gain later. However you go about saving money, try to keep it as simple and routine as possible.

A consistent strategy for saving money mean you still need to determine where the money that you save will go. Your savings needs to be divided up between short, medium and long-term financial goals.

Create a system that allows you to set up automatic transfers every month and move the money automatically so you don’t have to remember to set it aside. The more automated you can make the saving process the more likely you are to save consistently.

Spending your savings too rapidly will put you and your future retirement income at risk. I believe that you should always consider using some conservative form of withdrawal, particularly for any money needed for essential living expenses in the future. Consider annuities: To cover your income needs, particularly your essential expenses (such as food, housing, and insurance).

It is important to think about protecting what you've saved and helping to ensure that you'll have enough income throughout your retirement future. That means thinking ahead and planning for a retirement that may last 30 years or longer.

Choosing investments such as growth-oriented investments (e.g., stocks or stock mutual funds), Treasury inflation-protected securities (TIPS), real estate securities, and commodities, may also make sense to include as a part of an age-appropriate, diversified portfolio that also reflects your risk tolerance and financial circumstances.

An investment strategy (asset mix) that seeks to balance growth potential and risk (return volatility) may be the answer. You should determine—and consistently maintain—an asset mix that reflects your investment horizon, risk tolerance, and financial situation.