Every year I offer free budget courses through online or local libraries to help people get finance in order. Although you have heard many financial professionals suggest to others that they should create and maintain a budget, mot has never really explained how to actually accomplish this task.
The budget basically tells you what your income is doing. You start with 100% net income, then depending on the priority, you need to subtract your fees until the funds disappear. Now here is the part that makes some people confused. Some categories should not exceed a certain percentage of your income. For example, housing should not exceed 35%, debt 15%, savings 10%, charity / tithe 10%, and other 30%.
You may have several categories to suit your specific family needs. The examples in the above paragraphs are just general budgets. Regardless of which category you use, most of us have some basic accommodation and food.
If for any reason you are unable to keep up with your monthly expenses, be sure to pay the bills in this order:
Food
from
2. Housing
from
3. Utilities
from
4. Transportation
from
5. Insurance
from
6. Clothing
from
7. Other
Keep in mind that if your home exceeds 35% of your income, you must resolve this difference, and if the budget is still overwhelming, seek professional help. The goal of budgeting is to be able to pay all the costs, save money and live in your own way.
Orignal From: Financial knowledge - return to basics through budget
No comments:
Post a Comment