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| A Good Budget Leads to More Available Income |
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| Written by Frank Bolsom |
| Friday, 12 September 2008 08:12 |
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Creating a budget is easier said than done. It requires keeping good records, balancing your checkbook and organization. Many are not motivated to do it or simply do not like to work with numbers. But everyone will find it in their self-interest to make the effort to outline their expenses against income even if it requires getting someone else to help undertake the task. The budget should include monthly income and outgo, projections of expected increases and decreases and some buffer for the unexpected. A spreadsheet can be helpful and can be easily obtained free of charge. However, if this approach is intimidating, pen and paper will work just as well. Whether you are using a spreadsheet or a notepad, here is an easy method to follow: Separate your page into two columns, one for income and one for expenditures. Expenditures should include regular monthly bills, amounts spent on food, transportation and other routine expenses. If possible, include an extra 10% for miscellaneous expenses that you could not anticipate. To get an idea of how you can increase your available income, make another "hopeful" budget. List your income the same as in your real budget along with your monthly expenses that are unchangeable. What will be the difference in your "hopeful" budget? Your expenditures column will not include any loans or credit card payments that you hope to eliminate. Also this budget will show a reduced amount allotted for purchases made on a whim. The total of these excluded items is a good representation of the amount you could potentially save each month. Possibly non-essential expenses make up only a small portion of your total expenditures. However, even if the total is a minimum 10% by eliminating them you can notably increase your available income. Of course, reducing the amount you allow for non-essentials will require some sacrifice. Only you can decide if it is worth the effort to save for an item rather than charging it and paying interest. However the savings on interest charges makes it worth considering. Even a relatively small credit purchase can accrue interest of $100.00 or more in one year and even more if only minimum payments are made. Having an extra $100 in your pocket may make it worthwhile to consider paying cash. Your spending habits are your decision. Having a good budget will help you decide how to use your income wisely. About the Author: Is credit counseling the ideal way for you to get out of debt? It might be, but there's no one best way for everyone. Visit the Debt Smackdown website at http://www.debtsmackdown.com for more helpful tips & advice about clearing up your debt. Kindly provided by MoneyHunter.org You are welcome to use this article on your own website, if you include the link just before this text. |
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