IN order to have a better picture of your financial status and achieve your goal, whether it be to buy a home, a car, or to finance your schooling, you need to make a budget. This is the only way to look at your earnings, identify all your expenses and put away money towards your ultimate goal.

Budgets usually give us a wake-up call as to our potential earning capabilities as well as identify exorbitant spending habits and those almost unidentifiable expenses that cut us dry slowly but surely -- like those coffees on the go you have every morning five times per week.

Budgets get us in the attitude to see the need to create alternatives -- for example, instead of having coffee in a coffee shop every morning, why not try to make it from home with the ingredients you have there? Then, you can put the money saved towards the house you want to buy next year.

A key point in cutting back on your spending is to ask yourself, 'Do I need this or want it?' It's a personal technique of mine and it works all the time.

You will be surprised of some of the things that you really don't need and how much you could be saving, which makes you 10 steps closer to your goal.

Budgeting is a great tool to help us reach our financial goals. It's simple -- just identify your sources of income, your expenses and do the math. The step that I always emphasise is to always analyse the wants and needs, make necessities priorities on your budget. Stay positive and remember it will only happen if you do what you have to do.

Shakira Thomas is managing director of www.caribbeanchick.com -- The Source For Savvy Chicks

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