Tip The Best Financial Or Budget
To budget, to have a budget and to
be on a budget is not a bad thing; in fact, it's just about the best financial
situation you can find yourself in. A budget is a valuable financial management
tool which will enable you to pay your monthly expenses, save a certain
percentage of your income and control your expenditures.
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How can you stay within in your
monthly budget? There are several steps to making a budget.
1. The first step to making a budget
is to gather information about your take home income and other sources if you
have these (e.g. stock dividends). This allows you to determine what your true
financial standing is. Be systematic; write down exact amount of your income
and the other sources if you have them (e.g. stocks, dividends. Note the
schedule you expect to receive these sources.
2. You need to understand what each
and every bill or expense is intended for, in order to make an effective
budget. List of your fixed and recurring expenses and the due dates for these
expenses. Examples of these, weekly groceries, utilities, gasoline and mortgage
or rental expenses.
3. Track all expenses, as these are
not static. It will make your budget more efficient, when track these expenses
on a regular basis, rather than once or twice a month. You can then see the
variables and make the necessary changes in your budget to reflect this. Or
address the reasons why.
4. Monitor the discretionary portion
of your income. Where have you gone over budget? Too many cappuccinos at
Starbucks? Or is it an unexpected medical or house repair bill? You could start
a contingency fund in your budget to take care of unexpected bills.
5. Lastly, motivate yourself to save
and to spend wisely. Set up short and long term goals. A short-term goal will
enable to buy the latest plasma TV, or digital camera. Long term goals are ones
that enable to increase your retirement funds or to buy real estate properties.
You can record the details of your
budget, the expenses and sources of income in a
6-column ledger, or buy
personal budgeting software, and encode these details herein.
Remember though, that in order for
your budget to work you definitely need to spend less and save more.
