The average American household saved -2% last year. You did not not read a mis-print. Yes, -2% was saved in the average American household! This is a very interesting and troubling statistic. It means that as a country we are not saving, but going deeper and deeper into debt. Before I go on, let me explain that debt can be classified into two types -- good debt and bad debt. Good debt is incurred while purchasing an asset - something that you can sell and usually make a profit from. An example of good debt is an investment home purchase, a business or other asset that will appraise for a higher price than what you owe. On the other hand, bad debt is debt that cannot be listed as an asset on a financial cash flow sheet. An example of bad debt is unsecured debt, e.g., money owed on credit cards and items that do not appreciate in value, leaving you owing more than they are worth. I am sorry to say that the -2% that Americans saved last year was due to bad debt... mostly in unsecured credit card purchases.

Unchecked spending often takes place when people do not have a budget, or the self-control to follow one. Here's a scenario that I see over and over again: someone wants to borrow money to help pay their rent or mortgage, yet they have a home furnished from top to bottom with the latest technology! New plasma HDTVs, every electronic gadget ever invented and designer clothing are everywhere! Yet... they need to borrow cash to help them pay for basic living expenses. We used to run to the bank to help these people, out of a good heart. But, after a careful review of some folks' spending habits, we realized that we were paying for their mis-management of funds, rather than helping them out of misfortune.

If you do not know where your money is going, then you cannot accurately save, or invest wisely. It is a spiritual principle that however you handle a little bit will determine how you handle a lot. Many people who are striving to become financially wealthy fail because they neglect the basics. I recently watched an interview on "Larry King Live,"  where Oprah Winfrey was his guest. Oprah said that she is still involved in paying the bills for her multiple organizations. I admire the fact that a woman of so much wealth, and so busy, would still be minding her shop, so-to-speak! Oprah has demonstrated that she is worthy of more because of what she is doing right now. People like that can't help but continuously increase.

Budgeting is not a curse word, or something that you cannot do. You most certainly can! Trying to keep track of your money in your head is not wise, either.  You will never know exactly where your money is going unless it is documented, somehow. Some people may say, "I don't make enough to have a budget." This is a great error, because a budget is not dependent on the amount of money you make. A budget is designed to give you a clear picture of your financial situation. You should know what you need to live on and where you can make some changes. Your first step to becoming wealthy is being a good steward over what you have. When you show that you can be trusted with little, then you will be trusted with much. A budget can be your friend because it is designed to help you, not hurt you. Before I started a budget, I would keep track of my finances in my head. Now, with it on paper, I have freed up space in my mind to be creative! Creativity is what your mind is for.

Budgeting can help you prepare for future events and opportunities. Being prepared for opportunities is what separates those who are successful from those who want to be.

Below is a budget template that you might find helpful. Remember, a budget is your friend!

Budgeting tips:

1) Add in amounts in the appropriate rows.
2) If you do not have a positive net amount, see where you can make cuts if necessary (mobile, cable, electric bills, etc).
3) Be open to creative ways of making your net amount positive
4) Create some boundaries for how much you will spend in certain categories per month.
5) Add in amounts for entertainment (remember life is supposed to be fun), but don't overdo it.
6) Make sure you stick to the boundaries that are set.
7) Give one-tenth to a charitable cause or institution.
8) Watch your money grow.