BUDGETING - new years resolution!?

I have decided to make a budget, and STICK TO IT.

What percentage of my total budget should I allocate to long-term savings (house deposit), mid- and short-term savings, emergencies, clothes, entertainment, etc. Well, what do you do?

Anything else I should consider? What about savings schemes - savings acct? Term deposit? Investments? Remember I've just started.

What advice do you have? What's worked for you?

Tips gratefully accepted.

1) If you don't have an emergency savings account, get that first. The recommendation is everywhere from 3 months of expenses to 6 months of salary that you should have saved up, depending on how conservative you are. Regardless, start this immediately if you don't have it.

2) Sit down and map out what you spend. Here's a cheesy exercise. Take a little notebook w/ you for a week or two, and write down everything you spend and what its spent on. That will give you a very rough idea of your spending habits, and how much you spend on things. From that you can figure out clothes and entertainment budgets.

3) When first saving, start with a savings account. Here's a cute trick. Put an envelope on top of your dresser, under something. Every day, take a loose dollar out of your pocket, and put it in the envelope. Other than this routine, forget about the envelope. Every 60-90 days, empty out the envelope. and take that money to the bank to deposit into savings. It is an easy way to save 360 bucks.

4) Once you have an emergency account and a bit of money in a savings account, THEN open a CD. Remember, with a CD you can't touch the money, so make sure its money you definitely don't need. Start small, a 6 or 9 month CD to prove you can do it, then increase the term of the CD.

5) Oh, and for your savings account, use an online account. Why?
- better interest. Most online accounts get 4% interest or better
- harder to access. Its savings, so you want to be able to reach it, but not TOO easily
- easy balance check. Just a few keystrokes away.

Good luck!

A lot is US specific. A CD is a certificate of deposit, a short term savings account (sometimes called a share cert) that has higher interest, with the caveat that you cannot touch the money for a fixed period of time (called a term). This term can be from 3 months to five years, set by you. Report It

The one big tip I'd give you is to start off reasonable. Do NOT try to save more than you'll be able to keep up with. Do not restrict yourself too much if you haven't used a budget before. Do NOT try to make your budget too complicated.

I'd suggest you make simple spreadsheet. Put in your total income. Then group you spending into a few really high level categories and allocated percentages to those categories. I wouldn't get much more detailed than say 5%.

You should be saving at least 10% in your 401k. Any other money that you are saving I would recommend that you set up an account with someone like ING or someone else that offers free accounts with no minimums. Then you can move your savings into those accounts each month.

Last tip - make ANY money you are saving part of your budget.