• Friday, March 01, 2024
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Taking a harder decision on your money life


Have you looked at your money life? Does it suggest to you that you have been prudent enough in your spending? Do you not think that a better handling of your money could make you more financially freedom much earlier that you would have been?

This may not concern you if you are already up there and having no problem with income. But then, no amount is too much to last forever if is not properly managed.
What is important here is not about your future plans or your investments, but first of all coming to terms with your money movement.
It practically explains how much you earn and how you spend it.

Experts from online financial tips say one must live on budget. This will give you a picture of where your money is going and how you can live within your means.
According to them, you will need to try for some months at least before it becomes your habit

Practical money skills describe a budget as a plan for your future income and expenditures that you can use as a guideline for spending and saving. Although many people already use a budget to plan their spending, the majority also routinely spend more than they can afford. The key to spending within your means is to know your expenses and to spend less than you make. A good monthly budget can help ensure you pay your bills on time, have funds to cover unexpected emergencies, and reach your financial goals.

Most of the information you need is already at your fingertips. To create or rework your budget, follow the simple steps outlined below to get a clear picture of your monthly finances.
Add Up Your Income

To set a monthly budget, you first need to determine how much income you have. Using the worksheet at the bottom of this page, write the figure next to each relevant income source. Make sure you include all sources of income such as salaries, interest, pension and any other income–including a spouse’s income if you’re married.

If you get a salary, be sure to use your take-home pay rather than your gross pay. Taxes are usually taken out automatically, but if they’re not, remember to include them as another expense. If you receive money from somewhere not listed, enter the source along with the amount under “other income.”

Estimate expenses

The best way to do this is to keep track of how much you spend for one month. The worksheet below divides spending into fixed and flexible expenses. Fixed expenses are those that generally do not change from month to month, such as rent and insurance payments. Flexible expenses are those that do change from month to month, such as food or entertainment. If some of your expenses for one or more categories change significantly each month, take a three-month average for your total.

Figure out the difference

Once you’ve totaled up your monthly income and your monthly expenses, subtract the expense total from the income total to get the difference. A positive number indicates that you’re spending less than you earn–congratulations. A negative number indicates that your expenses are greater than your income. This means you will need to trim your expenses in order to begin living within your means.

Well done–you’ve created a budget. The next step is to track your budget over time to make sure you’re sticking to it. If you find you aren’t able to follow your budget successfully, it may mean that your plan isn’t flexible enough. It can take revisiting your budget a few times to find the balance that works for you.


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