Making and sticking to a budget is a lot like going on a diet; neither work if you don’t keep it realistic. Many people sit down to create their personal budget with the best of intentions only to throw it away when they are hit by an emergency, holiday or another unexpected occurrence. The key to creating a realistic budget is to expect the unexpected. Start the budgeting process by writing down all of the typical items you pay each month: mortgage or rent, utilities, car loan payments, credit cards, debt consolidation loans, etc. Then, make a list of less frequent bills or unexpected expenses that may come along, like: home and car repairs, birthday gifts and school clothes shopping. If you aren’t sure how much to calculate, then a good rule of thumb is to add 10% to whatever you spent last year. This percentage is probably much more than inflation (the increase in prices since last year), but better to be safe than sorry. If you have extra money left over at the end of the month, save it! If a truly unexpected expense comes along, you won’t have to resort to measures like using a credit card or taking out a personal loan. Finally, take the annual amount for this category and divide by 12 to arrive at the monthly amount you will be required to save in order to fund your unexpected budget category. Now you have a budget that is practical and realistic!