Antonio could keep his budget the same and hope he gets a raise at work.ī. What is the best way Antonio's budget can be modified to help him save enough for the $200 down payment and make the $500 monthly rental payment?Ī. His job as an assistant plumber requires him to have a car, but his hours are flexible enough to give him time on the weekends to have fun with his friends. He found a great apartment that has all utilities included. Well, if you have never prepared a personal budget before, it is time you start thinking about how to manage your hard earn money. The beginning can be uninteresting for some people, however prior financial planning can prevent many problems and personal budget management is one of the tools.Antonio is ready to move out of his parent's house and live on his own. Other applications like also offers on a free app in the Applet Store. The most common application for personal budget preparation is the Microsoft Excel. It will also help you understand the extend of your success towards the set financial goals. Variance analysis help you understand the categories where you spend most. Try to trace the variances between your actual spending to budgeted expenses. Compare your budget to what you have actually Spent. This is a continuous stage which also require to implement your budget by avoiding non critical unplanned spending. You need to record all your income and expenses as your incur them. Monitoring can only work when you keep record of your expenses and income. Take a look at your spending every month and compare it to your personal budget. While a budget can be a great tool for managing finances, it can quickly become overwhelming if it’s overly detailed or idealistic. This is how Basket Mouth will say it: If you have surplus, you are safe but if you have deficit, you have two things to do: Find ways and adjustments to increase your income or you should consider cutting elsewhere to keep expenses under control. Surplus is when your budgeted income is more than the expenses and deficit is the opposite. Find out if you have a surplus budget or deficit. You have to simply sum all your income and expenses. In fact, financial experts recommended that first payment from any salary should be to pay yourself first (savings). Your savings account can be very helpful, if you run into unforeseen expenses. It is much easier to save money if you consciously planned for it in your budget. If you have a monthly savings target (and I think you should), include it as an expense. Such grouping are called income or expense category. It will be helpful to group related incomes and expenses together. Variables needs are the non-contractual but important and it may include transport, food, entertainment, vacation, donation etc. Fixed budget will includes expense and incomes that are contractual such as house rent, loan repayment, utility bill, salaries etc. The budget should consider your personal situation and goals identified in step 1 and 2 above. This is where you prepare the real expense budget. Estimate the ExpensesĬreate a budget for fixed and variable expenses based on your projected income and goals. For salary earners, it will become simple if you can use the net salary credited to your bank account instead of the gross pay. For example of personal sources of income would include salaries, stipend from sponsors, allowance from parents, or income from investments. Where does your income comes from? List the sources of your income and the amount that comes in from each source. To prepare a monthly budget, you need to determine how much income you earn in a month. Short term goals may include paying for rent whiles long term could be higher education or set up a business in 3 years time.Įvery financial goal you set should be a SMART goal: Specific, Measurable, Actionable, Realistic, and Time Framed. For example if you are preparing a personal budget for one year, you need to state your goals in that one year and long term goals that would require savings in the current year. This process will help you to prioritize your goals. Four Possible Digital Tax Evasion in The GambiaĪt this stage it is important to distinguish your wants from the needs.
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