hen trying to get their finances in order, people commonly ask "How should I go about putting together a solid long-term budget?" According to Jim Cramer, there are six (6) steps to smart budgeting for life:
1. Learn from the past: Put together a comprehensive record of your past income and spending;
2. Judge your past: How much could you have saved?;
3. Create your short-term budget (ie 3 months and 6 months);
4. Create your long-term budget by incorporating your future expenses like buying a house;
5. Hold yourself accountable each month, which is the single most important thing you can do to plan for long-term wealth; and
6. If you fail, take drastic measures. For example, automate your savings or drastically cut expenses.
For more information read Jim Cramer's book "Stay Mad for Life" (Simon & Schuster 2007)
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