Oh, Oh, it is budget time again. The holidays are over, your credit cards are maxed out, and yet..there is another of those great travel ticket sales on. It is so tempting to take just one more trip. You know you really shouldn't not so close to the last one. You just love that `shop `til you drop' feeling.

Government has released its new budget; maybe it's time for you to take a look at yours. You may only be a household of one or two or three, but wouldn't you, for once, like to know just exactly, where your money is going? The countless lines of ATM withdrawals on a bank statement don't tell much, besides who remembers?

Denial Will Get You Everywhere

You would rather not think about this; that's OK, denial will get you everywhere. In fact, denial works very well for many people. They refuse to think about the future, or so they say, but worry can manifest itself in many other ways, stress, hair loss, constant illness. Take charge of your financial life! Otherwise, when you end up in a situation where you need to make a major life decision, how will you know what to do?

Make It A New Habit

With the development of any new habitand budgeting is just thata habit, the standard advice is to start small. Take baby steps, push yourself forward to the next one, and praise yourself for the last one. Starting with some of these money behaviors will provide the springboard you need to dive in!

Where do you start?

Look at your current spending habits. Look through your checkbook, ATM withdrawals (remember what you spent any of that on?) statements, and receipts. Start gathering information on where and how much money you spend in various categories on a weekly or monthly basis. Some people are incredibly disciplined and write down every single thing they buy every day - for a whole month. You can really see spending patterns with this diligence.

Take Baby Steps

Speaking of baby steps, don't forget the power of compounding. Suppose you are a new parent and you want to ensure a golden retirement for this child later in life, or in terribly tough circumstances, your child has a disability and you worry every day what will happen to this child when you are gone. As soon as you can after the baby is born, you begin depositing $100 every month into an savings account. You continue to do that until the child's 6th birthday, at which point you stop. You leave the money in the account and never touch it. assuming a six percent interest rate when your child retires at age 65, your investment will have grown to $295,179. Hard to believe, isn't it? Does that relieve a little anxiety?

DISPELLING THE MYTHS

Myth #1: You have to suffer to use a budget. Many people never even consider starting a budget because they are afraid they will have to "give up" something. The real truth is, you are following a budget whether or not you have consciously implemented one. Unfortunately, the "budget" you end up with by doing nothing is almost certainly an endless cycle of reactions, as opposed to a forward thinking, proactive strategy. A reactive mode contains the double whammy of the anxiety of wondering when the money will run out, and then feeling deprived when it does. A budget will actually reduce your aggravations.

Myth #2: You have to be in debt to budget. Another popular misconception is that budgets are only for people who are in real financial troubleindividuals who are severely in debt or currently living way beyond their means. The truth is that everyone can benefit from budgeting. Successful companies, operating solidly in the black and generating millions of dollars in annual revenue, all maintain budgets., and they do it because budgets work.

Myth #3: You have to spend extra hours doing paperwork. Another common fear is that budgeting will take huge amounts of time. Keep it simple.

Take Bigger Steps And Do It Now

Cut the amount of pocket cash in half. Set a goal of using an ATM machine once a month. Portion out what you need each week, and when it is gone it is gone. Pay your bills as soon as they are do, and put that discount aside. Try to make your clothes last longer; take out frustration at no shopping on exercising. A very long walk will use up as much energy, and it is free. Eat one-third less than you do now, don't give anything up, just eat less. Drink water not soda. Buy cellphone cards, not unlimited billing. Watch all the small spending habits. Bet you can't put aside another $200 a month. But, if you can.....watch it grow and off you go.

Martha Harris Myron CPA CFP is a Certified Financial Planner (tm) (US) practitioner. She holds a NASD Series 7 license, was a US tax practitioner, and is the winner 2001-The Bermudian Magazine - Best of Bermuda Gold Award for Investment Advice.

Confidential Email can be directed to marthamyron northrock.bm

The article expresses the opinion of the author alone. Under no circumstances is this advice to be taken as recommendations to buy or sell investment products or as a promotion for financial plans. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.