How to Manage Personal Budget

Managing the Budget

Creating a budget is not difficult . All you have to do is set aside time to make arrangements and planning . If it is made ​​, a budget can be easily managed . Steps to manage a budget :

• Step 1 : Determine the target

The first thing to do is to specify a target , for example, has a new home , early retirement , or preparing for education expenses .

You can group your goals into three categories : short-term financial targets , medium term and long term .

Ask yourself : What is important to me ? What do I need? What do I want? The answer to these questions will help you determine your target . If you are married , you and your partner should discuss their answers together to decide the target .

TIPS

determining Target

Write down your targets . If you already know what you want , you can begin to make a budget .

1. Short-term targets : Is the target you want to achieve in less than one year to the next , such as paying off credit card bills , buy a television or a refrigerator , or saving for a vacation .
2. Medium-term targets : Is the target that you want to accomplish in the next two or five years into the future , such as down payment on a home purchase .
3. Long-term targets : Is the target you want to achieve in more than five years forward , such as retirement savings and college tuition .

• Step 2 : Collect information

Collect all the data of household income and expenditure . Thorough and honest when making expenditure estimates . Budget that you create must be an accurate picture , not the "best possible " . Collect the following :

- Salary Slip

- Tax Returns

- Note checkbook

- Credit card bills

- Receipt important purchases such as a car loan

- Receivables from banks or other financial institutions

- Other expenditures , such as : monthly shopping , social gatherings , school fees , etc.

TIPS

Managing information held

You have to manage the information that you have into three parts . The third section will be used to create a budget .

1. How much income you : Collect all types of income , such as : including " clean wage " after taxes , commissions , bonuses , social security or pension , disability assurance , interest income , dividends , and other allowances .
2. How much money do you spend : Collect all fixed expenses and variable expenses are not fixed . Spending is spending that amount remains unchanged every month , such as rent , loan , insurance , loan payments , retirement savings , tuition , money and other social gathering . and usually can not be contested . Expenses are not fixed variable expenses which amount is subject to change and may be reduced or eliminated , such as cable television subscriptions , daily shopping , petrol, phone bills , and others. and can be reduced or eliminated .
3. Number of late : Subtract total expenses by total revenues . The result is a reduction in the budget balance . If spending is greater than revenue , the budget shows an unhealthy condition . If spending less than income , then the remaining amount remaining amount is called " discretionary income " . This is a number that can be used for emergency purposes or saved to and meet budget targets . And this shows the condition of a healthy budget .

• Step 3 : Understand your current financial position

After all the information collected , you can see the relationship between income and expenditure . You can use numbers when making a budget estimate for the first time , because it takes time to understand your actual financial position . This information can at least give you an idea of ​​shopping behavior is good and right.

• Step 4 : Check the number of final

The final amount that you have is the difference between your income and the amount you are spending . This figure gives an indication of whether you are spending too much money or not . If the number is positive , you can increase the amount of your savings and if the number is negative , it means you are spending more money than revenue .

If you spend more than 15 % to 20 % of net income to pay the debt and credit cards , chances are you are in a danger zone . If the final amount is negative, you have to examine your expenses , especially those that are not fixed , so that your spending habits back under control.

• Step 5 : Record spending

After you do the initial stages of the budget calculations , start to record monthly expenses . Even if your final number is positive, it helps you understand your spending patterns so far .

Carry a small notebook wherever you go for the record spending and cash withdrawals . Of note that you do , you could be surprised to find your spending patterns . Many people who realized that they could spend millions of dollars just to buy snacks , clothes or pay the mobile phone bill . Usually problems arise due to the purchase of the goods are not important , which otherwise was actually not purchased anything . The purpose of this listing is to look at the pattern and amount of your expenses .

If you feel your financial mess , try implementing measures to make budget and planning below so you can get back in control of your finances . Maybe you need some time to fix the spending patterns , but you need to continue to adapt to get the most appropriate financial planning with your financial behavior and condition .

Manage the expenditure is not easy , so include your family in the planning . They also can help your financial arrangements . In addition , the changes you make may affect them as well , so they should also be involved in the budgeting process .

TIPS

Overcome financial problems begin

You will run into problems or are on the verge of a problem if your bill swell while your income has not increased . Immediately fix your finances if there are at least two points below that suits your current situation .

- Bill me monthly minimum 20 % or more of net salary , not including rent or mortgage payments .

- I withdraw cash from one credit card to pay another credit card .

- I do not know the total amount of the loan and use my credit card .

- I got a call or letter from a bank or lending institution does not make the payment due at maturity .

- I am often late paying bills .

- My credit application was denied .

- My income is not enough to pay all my bills current .

 My credit card was declined while buying something because its use has been exceeded .

- I have more than three credit cards are all I use .

- I have three credit cards and still apply for a new credit card.

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