Budgeting never is and never has been one of the most exciting things that one would like to do. But, at the same time, when it sends chills down the spine, it is the best way to take control of an individual's finances and save for investments and pre-meditated plans or maybe just get out of debt. A monthly budget can help a person to decide how to spend his money, pay off existing debt, plan for the future and save a little each month by reducing impulsive purchases and arresting desire for scatter-goods.
Before one proceeds to create a budget, he needs to realize that in order to be successful with it, maximum detailed information is necessary. So, one needs to gather all the financial statements, which would include bank statements, recent utility bills, investment accounts and any information regarding source(s) of income or expenditure. This would help in developing an idea of the monthly average of what is spent or what one earns.
With all the information on the sources of income, an aggregate is prepared of one's total monthly income and, hence, the total amount at hand. Now, one needs to have a list of monthly expenses. For this, one would need two separate budget lists - one meant for the fixed expenditure and the other for variable expenses.
Fixed expenditure would include the expected expenses which would incur in a month like, mortgage or rent payment, auto or medical insurance deposits, college savings, electricity bills, groceries, etc., whereas, the variable ones maybe the amount you spend when you dine at Starbucks or the pizza that you buy at times.
There would always be some expenses in the variable list, which would be flexible enough to cut back or to be held up for some other month or time. These expenses can be highlighted.
Now, that one has an estimate of what he spends, where he spends and how he spends, one could go through the past transactions, so that it becomes clear that how much one actually spends on fixed and variable expenses separately.
Now, it would be easy to add up the expenses lists separately and, then, subtract the fixed amount from the total income and, then, subtract the variable amount from it. If one is still left with some money, then, it would be wise to go for a) repaying past debts or b) a savings plan or any suitable investment. But, if the amount runs into negative numbers, one should go for the highlighted headings under the variable list of expenses to trim the margin from zero to negative.
But, that is not the end. One needs to keep reviewing the budget monthly. It is important to review it on a regular basis to make sure that one stays on track. After the first month of this budget, one could take a minute to sit down and analyse the actual expenses versus what he had created in the budget. This would clarify which places need to be checked upon and which places are fine enough. With that much, the budget is prepared and within just a score of minutes.
For more budget tips visit: http://financecareeducation.com/
Before one proceeds to create a budget, he needs to realize that in order to be successful with it, maximum detailed information is necessary. So, one needs to gather all the financial statements, which would include bank statements, recent utility bills, investment accounts and any information regarding source(s) of income or expenditure. This would help in developing an idea of the monthly average of what is spent or what one earns.
With all the information on the sources of income, an aggregate is prepared of one's total monthly income and, hence, the total amount at hand. Now, one needs to have a list of monthly expenses. For this, one would need two separate budget lists - one meant for the fixed expenditure and the other for variable expenses.
Fixed expenditure would include the expected expenses which would incur in a month like, mortgage or rent payment, auto or medical insurance deposits, college savings, electricity bills, groceries, etc., whereas, the variable ones maybe the amount you spend when you dine at Starbucks or the pizza that you buy at times.
There would always be some expenses in the variable list, which would be flexible enough to cut back or to be held up for some other month or time. These expenses can be highlighted.
Now, that one has an estimate of what he spends, where he spends and how he spends, one could go through the past transactions, so that it becomes clear that how much one actually spends on fixed and variable expenses separately.
Now, it would be easy to add up the expenses lists separately and, then, subtract the fixed amount from the total income and, then, subtract the variable amount from it. If one is still left with some money, then, it would be wise to go for a) repaying past debts or b) a savings plan or any suitable investment. But, if the amount runs into negative numbers, one should go for the highlighted headings under the variable list of expenses to trim the margin from zero to negative.
But, that is not the end. One needs to keep reviewing the budget monthly. It is important to review it on a regular basis to make sure that one stays on track. After the first month of this budget, one could take a minute to sit down and analyse the actual expenses versus what he had created in the budget. This would clarify which places need to be checked upon and which places are fine enough. With that much, the budget is prepared and within just a score of minutes.
For more budget tips visit: http://financecareeducation.com/