This is the second part of a series on budgeting. The first, Frugal Facts: Get Your Expenses in Hand (Part I), steps you through the process of categorizing expenses. Now you’ll rework that budget, cut out unnecessary spending and save money for things you really want.
After you’ve made an expenses spreadsheet, it’s time to look at income. Be realistic. When in doubt, err on the low side. If you list gross income, compensate by adding an expense category marked “Taxes.” Even if you get bonuses and gifts throughout the year, you can’t count on them, so don’t list them. Think of them as financing a special category or something you are saving towards (car, furniture, vacation).
Your Income should equal your Expenses, but it rarely does. To see that discrepancy in print should emphasize why you are always scurrying around to make ends meet.
To see the full article, go to Associated Content.
I was born to two Depression era parents and a father that was a genius at money handling. (All God's gifts of course), so I've grown up in an atmosphere of good money stewardship.
ReplyDeleteI didn't quite inherit all of my dad's money genius, but not being a flamboyant personality or hung up on "keeping up with the Joneses" I always had a sense of responsibility for my lifestyle, so I have NEVER missed a payment for any bill.
That said, because I wasn't gifted with my dad's full genius, I did make some mistakes, particularly in the ten year job drought that followed my college graduation. I knew that credit cards were dangerous, but when an opportunity presented itself that seemed worthy of my money, I fell for it.
The result was a CC debt load that at the end of those ten years, matched my new job's annual income.
Several years later, during a couple of smart moves, I was introduced to the Dave Ramsey book, "The Total Money Makeover" and shortly thereafter took his Financial Peace University course via my church's facilitation.
The lessons re-learned and a few new ones discovered have helped me immensely in recovering from a depressing situation.
http://www.daveramsey.com/new/baby-steps/
This is the outline of his financial recovery class