Personal Financial Budgeting – The foundation for wealth

How much time do you want to spend budgeting for your personal finances every month? Hour? What about 20 minutes. To be a winner, you must be as good as possible on paper. If yes, you will know exactly how your money goes in and out of your life, and you will be able to take a complete command of the process.

First, dig all dirt on yourself. Remove all bank account statements, investment reports, bills, receipts that you can find. Everything that documents money comes or goes. You want to be able to get a monthly average – more information, the better.

Next, register all of your different sources of income. In addition to your regular work, documenting other sources of income. If your employer has issued a tax of your salary, just use your net payment number. Add all this and label it “monthly income”.

Next, collect all your documented expenses. From your past bills, you must be able to produce a reasonable prediction of how much you will pay in the bill in the coming month. Everything starts from a mortgage to a car loan, grocery bills to gas bills, insurance for investment, savings – everything you spend gets this money.

Take all these expenses and for them into two categories: fixed costs and variable costs. If certain bills remain almost the same from the month to month, give the “fixed cost” label. This will be your mortgage, car loans, cable / satellite bills, and others like this.

You will find that most of the things in this category are very important, but rarely change in number. Next, take all your changing spending every month: gas, food, clothing, eat outside. Labeli them “variable costs”. You will find that you can be flexible enough with items in this category.

Add your income. Add your expenses. If you have more income than expenses, you are at a good starting point. You can take the remaining money and do something with it like saving or paying off debts.

If you have more costs than income, you must change one category. You can increase your income or reduce your expenses. Remember, the goal is to have the same amount of income and load. The remaining money will be wasted. Each nickel must be categorized in the end.

However, the first place you can cut easily in your variable costs. This is your non-essential; It is easier to do without DVD rental rather than turning off your electricity.

Finally, every month discuss your budget. If you check your progress every month, you will start making progress. This review session is much easier and shorter than the initial budgeting session. You will have the opportunity to see where you succeed and where you need a little more work.