A personal budget is simply a spending plan. Before you work on personal budget planning you need to have a good idea of where and how your money is being spent. It can be a tedious process, but it can also be a true eye opener if you are not already well aware of how and where you are spending your income. Many people tend to spend their money with no real idea of where it is going. The first step to making a budget that you can live with is to come up with an accurate and easy to follow system for accounting for your expenses.
Track your spending! One simple and inexpensive method for tracking your spending is to purchase a small notebook from a grocery store. Keep this notebook with you at all times, and every time you spend money, write it down. You need to be able to keep track of ATM withdrawals, debit transactions and credit card expenses. You may also consider using a simple spreadsheet software program or a paper system in order to record and track your expenses from day to day.
Budgeting doesn't mean hoarding your pennies.
Create a budget! Having a budget does not mean that you have to squirrel away every penny, doing without important things that you need in your life. What it does mean however is that you are making sure that your most basic needs are being taken care of first and foremost, and that you are keeping yourself aware of how much money you have for splurging purposes. After you track your expenses, the next step is personal budget planning. Here are some things that will better simplify the personal budget planning process.
Income –
Make sure to include all sources of income and revenue, including gross income paychecks, child support, alimony, bonus checks, government checks, investments, retirement and personal business income as well.
Recurring Expenses –
Here are some of the usual monthly recurring expenses that you may find yourself dealing with. Along with your record of spending, this list will help to make sure that you are remembering everything that you need to account for: Food, home insurance, childcare, health insurance, gas, automobile insurance, electric, cell phone, home phone, internet access, cable, satellite television, water and sewer, prescriptions, dining out, garbage service, school lunches, entertainment, work lunches and charitable giving as well. You are also going to want to include monthly savings account goals, dining out, movies and other activities that you will spend money on regularly.
Variable Expenses –
This is a list of expenses that come regularly but not on a monthly basis. Some examples are spending for holidays like Christmas, Thanks giving, birthdays, personal care, income and property taxes, household repairs, prescriptions, doctor visits, clothing, shoes, school tuition, book costs, school supplies, school expenses, home equity, mortgage expenses and automobile expenses.
Unsecured Debts –
Here you should make sure to track any credit card debt, loans, school loans and other types of unsecured debt that needs to be paid off.
In order to put together all of these personal budget planning elements, you need to track your income and expenses on a month by month basis. Take the net amount you earn from each income source and figure out how much is earned in a year following this plan, then divide by twelve for a monthly average. Do the same with your expenses to come up with an average monthly amount. This is the best way to budget. It may not be exact, but it does allow you to more effectively and efficiently plan both for incomes and expenditures.
Photo Credits: 1
Originally posted 2008-12-03 05:02:26. Republished by Blog Post Promoter
Related Articles -
Finding a Legitimate High Yield Investment Most people hear the words High Yield Investment Program, or the acronym HYIP, and many of them quiver. This is not completely unnatural, because high yield investments only come with high risks, and most HYIP opportunities are not even legitimate to begin with. There are simply too many people out...... -
Teach Teens to Save Money /caption] One of the biggest reasons why having a teenage child can be difficult is because teenagers tend to spend money easily and freely without any real regard for what goes into earning that money in the first place. Teenagers tend to spend a great deal of money on clothes,...... -
Save Money with These 4 Tips /caption] There are ways that you can save money, and all you need to do is learn about managing money wisely to do it. You are not necessarily being frugal, per say, but rather you are learning how to be wise in the decisions that you make. Unfortunately, most people...... -
How to Put Together an Emergency Fund [/caption] If you are concerned about the state of your finances, your job or if you would just like to have a safety net that will be there to catch you if something goes wrong, an emergency fund is a very powerful tool to have in your financial arsenal. Emergency...... -
Personal Budget Planning is Crucial! /caption] Personal budget planning is absolutely crucial if you want to build personal wealth and overcome things like the credit crunch and the current problems that the economy is experiencing. The word "Budget" is one that worries a lot of people because it often seems more like a hassle and......
Related Sites -
Budgeting for Those Bereft in Budget Sense: Have an income and wonder how it disappears? If you have a problem with spending all your income, it is a problem, but can help you better relate to the budget realm. The purpose of a budget is to spend your income, but with designated purpose. A budget is essentially...... -
Creating a Budget 2 Now that you know where your money is coming from and where it is going, the next step in this budget creation process is going to be for you to break all of your expenses up into two different categories, separating your fixed expenses from your variable expenses. Fixed Expenses...... -
Passive Income Idea With A Spin Most would agree that diversification plays a big role in the success of one's personal finances. Spreading out risk is helpful in any environment, but is especially important when times are tough. It is just as important to diversify income as it is investments, because until we achieve financial independence...... - The Best Money Saving Ideas of All Time. So, many people think they know the best way to save money, whether it is by putting aside a few dollars a week under the mattress, staying out of credit card debt, investing in the stock market, owning a home for the tax write off, etc etc. In the search......
- How to create a workable budget The idea of creating a budget sometimes makes people throw up their hands in frustration, but it's not as hard as it may seem at first. Generally it's hardest when you have no idea of what your expenses might realistically be -- such as when you move out on your......
Tags: atm withdrawals, bonus checks, business income, child support, credit card expenses, eye opener, government checks, grocery store, gross income, home insurance, important things, notebook, paychecks, personal budget, personal business, retirement, software program, spreadsheet software, squirrel, support alimony