Archive for the ‘Finance’ Category
Basics of Creating a Budget
Because your budget is the amount of money that you will allocate for a particular purpose, it is important to plan very carefully. You should include in your budget your revenue, total expenditures and capital expenditures over a period of time. A budget will allow you to project future expenses and even save money and time.
Look at where your money comes from and where it goes. If you are already keeping track of your expenses, creating a budget is not a big deal. If this is your first time creating a budget, begin tracking all of your income and expenses for at least three months, recording all your purchases and payments, jotting down your expenses or holding on to receipts. This should even include the mid-night run to convenient store for snacks.
Create categories and write down how much are you spending monthly for every category. Try to keep two main categories of expenses: essential and non-essential expenses, and then break them down in sub-categories. Essential is everything that you and your family need for living such as mortgage payments, utilities, groceries, etc…
Non-essential are those extra things you spend your money on, whatever they might be, and including small items, usually paid with cash where you forget to grab the receipt.
Include all debt, all money put back into savings, and even your children’s allowance and lunch money. After gathering all the information, make a realistic budget, yet one that will be easy to follow.
Be honest with yourself and do not be afraid, since a budget has nothing to do with filing tax forms as many people mistakenly believe. Budgets help people to manage their money by distributing their income in a way that allows them to save money, establish good credit, and even make the money grow instead of increase their debt.
Let’s try an imaginary situation of a couple, John and Jane, both employed, whose total income is $1,200.00 every two weeks, however, John is paid weekly and Jane every 2 weeks.
Although they receive additional amounts as bonus and paid overtime, that money is not guaranteed and is only received from time to time. Budgets are created on monthly basis, on the total combined net income, which will appear on their budget as $2,400.00 monthly and should not include the extra income for budgeting purposes.
However, the assumption of the net income is wrong because of their payments cycle, although this may not be a problem when you and your partner have the same payment cycle.
A person who is paid 52 times a year obtains a net income of $18,200, while the partner is being paid 26 times receives an income of $13,000 yearly. Combining both incomes, the total sum is $31,200 that must be divided by 12 months, yielding an income of $2,600.00, returning $200 a month more than the first-glance amount figured incorrectly.
Then, a preliminary budgeting list to know their monthly expenses may look like this
Utilities . . . . . . . . . . . . . . . . . . 100.00
Telephone . . . . . . . . . . . . . . . . . . 45.00
Groceries ($100.00/week) . . . . . . . . . . – 428.33
Entertainment . . . . . . . . . . . . . . . . 90.00
Weekly Cash ($50.00/week) . . . . . . . . . . – 200.66
Savings . . . . . . . . . . . . . . . . . . – 100.00
Medical . . . . . . . . . . . . . . . . . . – 36.00
Life/Health insurance . . . . . . . . . . . . 150.00
Loan payment . . . . . . . . . . . . . . . . – 25.00
Auto loan . . . . . . . . . . . . . . . . . . 280.00
Auto insurance . . . . . . . . . . . . . . . . 150.00
Auto expenses (gas, etc.) . . . . . . . . . . 100.00
Mortgage payment . . . . . . . . . . . . . . – 550.00
——-
Total Monthly Expenses . . . . $2254.99
Studying the list, they can determine how to apply their money to keep more money free for saving or any other purpose, and even create the budget from a percentage perspective to make it more flexible. We recommend using a loan or mortgage calculator to determine whether or not refinancing would benefit you financially. Furthermore, you can use credit card calculators to figure out how much money you are wasting on interest and other fees. Stop throwing your money away, and learn to live within your means.
By: Elizabeth Culpeppper
About the Author:
Look at where your money comes from and where it goes. If you are already keeping track of your expenses, creating a budget is not a big deal. If this is your first time creating a budget, begin tracking all of your income and expenses for at least three months, recording all your purchases and payments, jotting down your expenses or holding on to receipts. This should even include the mid-night run to convenient store for snacks.
Create categories and write down how much are you spending monthly for every category. Try to keep two main categories of expenses: essential and non-essential expenses, and then break them down in sub-categories. Essential is everything that you and your family need for living such as mortgage payments, utilities, groceries, etc…
Non-essential are those extra things you spend your money on, whatever they might be, and including small items, usually paid with cash where you forget to grab the receipt.
Include all debt, all money put back into savings, and even your children’s allowance and lunch money. After gathering all the information, make a realistic budget, yet one that will be easy to follow.
Be honest with yourself and do not be afraid, since a budget has nothing to do with filing tax forms as many people mistakenly believe. Budgets help people to manage their money by distributing their income in a way that allows them to save money, establish good credit, and even make the money grow instead of increase their debt.
Let’s try an imaginary situation of a couple, John and Jane, both employed, whose total income is $1,200.00 every two weeks, however, John is paid weekly and Jane every 2 weeks.
Although they receive additional amounts as bonus and paid overtime, that money is not guaranteed and is only received from time to time. Budgets are created on monthly basis, on the total combined net income, which will appear on their budget as $2,400.00 monthly and should not include the extra income for budgeting purposes.
However, the assumption of the net income is wrong because of their payments cycle, although this may not be a problem when you and your partner have the same payment cycle.
A person who is paid 52 times a year obtains a net income of $18,200, while the partner is being paid 26 times receives an income of $13,000 yearly. Combining both incomes, the total sum is $31,200 that must be divided by 12 months, yielding an income of $2,600.00, returning $200 a month more than the first-glance amount figured incorrectly.
Then, a preliminary budgeting list to know their monthly expenses may look like this
Utilities . . . . . . . . . . . . . . . . . . 100.00
Telephone . . . . . . . . . . . . . . . . . . 45.00
Groceries ($100.00/week) . . . . . . . . . . – 428.33
Entertainment . . . . . . . . . . . . . . . . 90.00
Weekly Cash ($50.00/week) . . . . . . . . . . – 200.66
Savings . . . . . . . . . . . . . . . . . . – 100.00
Medical . . . . . . . . . . . . . . . . . . – 36.00
Life/Health insurance . . . . . . . . . . . . 150.00
Loan payment . . . . . . . . . . . . . . . . – 25.00
Auto loan . . . . . . . . . . . . . . . . . . 280.00
Auto insurance . . . . . . . . . . . . . . . . 150.00
Auto expenses (gas, etc.) . . . . . . . . . . 100.00
Mortgage payment . . . . . . . . . . . . . . – 550.00
——-
Total Monthly Expenses . . . . $2254.99
Studying the list, they can determine how to apply their money to keep more money free for saving or any other purpose, and even create the budget from a percentage perspective to make it more flexible. We recommend using a loan or mortgage calculator to determine whether or not refinancing would benefit you financially. Furthermore, you can use credit card calculators to figure out how much money you are wasting on interest and other fees. Stop throwing your money away, and learn to live within your means.
By: Elizabeth Culpeppper
About the Author:
Elizabeth Culpepper is a staff writer for Direct Lending Solutions
Samuel Wannamaker
Budgeting For Interest Rate Rises
On Wednesday April 4, the Reserve Bank of Australia (RBA) decided leave the official cash rate on hold at 6.25%, saving homeowners the much anticipated 0.25% increase in variable mortgage rates. Many analysts are tipping the RBA is waiting on official March inflation rates before deciding on any increase and believe an increase is likely in May.
www.news.com.au stated that “Higher rates are forcing people into financial hardship with a survey by NEWS.com.au and Coredata released today revealing almost one in three Australians would be forced to sell their home if interest rates rose by 1 per cent.”
Furthermore, “Of property investors, 44 per cent said a 1 per cent rate rise would force them to sell their properties as mortgage costs got too much to service.”
Take the following mortgage and see what happens when interest rates increase:
Current situation
Loan amount$400,000
Interest rate7.99%
Loan term25 years
Weekly minimum repayment$711
Total interest payable over 25 years$524,642
0.25% interest rate rise
- Weekly minimum repayments will increase to $727
- Total interest payable over 25 years will increase to $544,588 – that’s another $19,946!
- Additional amount required per annum to satisfy minimum repayment requirements will be $812
0.50% interest rate rise
- Weekly minimum repayments will increase to $742
- Total interest payable over 25 years will increase to $564,706 – that’s another $40,064!
- Additional amount required per annum to satisfy minimum repayment requirements will be $1,616
1.00% interest rate rise
- Weekly minimum repayments will increase to $773
- Total interest payable over 25 years will increase to $605,445 – that’s another $80,803!
- Additional amount required per annum to satisfy minimum repayment requirements will be $3,246
The Sunday Herald Sun reported on April 8 that “Battling families are using their credit cards to pay their mortgages in last ditch efforts to save their homes.” reporting one family that has accumulated approximately $160,000 in credit card debt on eight credit cards and that “charities and financial counsellors say there are thousands more – many just one interest rate rise from losing their homes.”
All this talk about interest rate rises and the impact it is having on homeowners enforces the important of staying in control of your finances. Applying additional amounts to the mortgage repayments means families will need to cut back on other areas of spending to avoid the trap of financing their lives via credit cards which attract interest rates of approximately 20% p.a..
The best way to stay in control of your finances is to ensure you regularly complete a budget. Budgeting is the key to understanding how much you are spending and where you are spending your money – this is the first step to being able to save money.
By regularly completing a budget you regularly understand where and how you plan to spend your money over the coming period. That way you can determine which areas of your spending can be better managed i.e. where you can save money which can be applied to those additional mortgage repayments.
For those people who struggle with budgeting or don’t know where to start when it comes to budgeting, www.easy-budgeting.com can help.
www.easy-budgeting.com has made the process of budgeting easy and possible for everyone. The web site offers a simple and easy to use 12 month budget model created in Microsoft Excel. You don’t need to be a computer wizard or an Excel expert, you just need to have the desire to control your finances.
The main feature of the 12 month budget model provided by www.easy-budgeting.com is the ability of the user to budget an income or expense item by completing just 3 easy steps. The user simply selects the start month, the frequency and the amount of the income and/or expense and the data for the 12 months is automatically generated based on the parameters selected.
After completing the budget and reviewing the 12 month summary and the expenses graph, users can easily determine where their money is being spent and where cut backs are possible. The budgeting process will help you identify your problem areas, take control of your spending and ensure you are better prepared to manage those inevitable interest rate rises. If completed regularly, budgeting will become second nature and you’ll find that your money will go further and work harder for you and your family.
Visit www.easy-budgeting.com for more information on the 12 month budget model.
By: Rhys Campbell
About the Author:
www.news.com.au stated that “Higher rates are forcing people into financial hardship with a survey by NEWS.com.au and Coredata released today revealing almost one in three Australians would be forced to sell their home if interest rates rose by 1 per cent.”
Furthermore, “Of property investors, 44 per cent said a 1 per cent rate rise would force them to sell their properties as mortgage costs got too much to service.”
Take the following mortgage and see what happens when interest rates increase:
Current situation
Loan amount$400,000
Interest rate7.99%
Loan term25 years
Weekly minimum repayment$711
Total interest payable over 25 years$524,642
0.25% interest rate rise
- Weekly minimum repayments will increase to $727
- Total interest payable over 25 years will increase to $544,588 – that’s another $19,946!
- Additional amount required per annum to satisfy minimum repayment requirements will be $812
0.50% interest rate rise
- Weekly minimum repayments will increase to $742
- Total interest payable over 25 years will increase to $564,706 – that’s another $40,064!
- Additional amount required per annum to satisfy minimum repayment requirements will be $1,616
1.00% interest rate rise
- Weekly minimum repayments will increase to $773
- Total interest payable over 25 years will increase to $605,445 – that’s another $80,803!
- Additional amount required per annum to satisfy minimum repayment requirements will be $3,246
The Sunday Herald Sun reported on April 8 that “Battling families are using their credit cards to pay their mortgages in last ditch efforts to save their homes.” reporting one family that has accumulated approximately $160,000 in credit card debt on eight credit cards and that “charities and financial counsellors say there are thousands more – many just one interest rate rise from losing their homes.”
All this talk about interest rate rises and the impact it is having on homeowners enforces the important of staying in control of your finances. Applying additional amounts to the mortgage repayments means families will need to cut back on other areas of spending to avoid the trap of financing their lives via credit cards which attract interest rates of approximately 20% p.a..
The best way to stay in control of your finances is to ensure you regularly complete a budget. Budgeting is the key to understanding how much you are spending and where you are spending your money – this is the first step to being able to save money.
By regularly completing a budget you regularly understand where and how you plan to spend your money over the coming period. That way you can determine which areas of your spending can be better managed i.e. where you can save money which can be applied to those additional mortgage repayments.
For those people who struggle with budgeting or don’t know where to start when it comes to budgeting, www.easy-budgeting.com can help.
www.easy-budgeting.com has made the process of budgeting easy and possible for everyone. The web site offers a simple and easy to use 12 month budget model created in Microsoft Excel. You don’t need to be a computer wizard or an Excel expert, you just need to have the desire to control your finances.
The main feature of the 12 month budget model provided by www.easy-budgeting.com is the ability of the user to budget an income or expense item by completing just 3 easy steps. The user simply selects the start month, the frequency and the amount of the income and/or expense and the data for the 12 months is automatically generated based on the parameters selected.
After completing the budget and reviewing the 12 month summary and the expenses graph, users can easily determine where their money is being spent and where cut backs are possible. The budgeting process will help you identify your problem areas, take control of your spending and ensure you are better prepared to manage those inevitable interest rate rises. If completed regularly, budgeting will become second nature and you’ll find that your money will go further and work harder for you and your family.
Visit www.easy-budgeting.com for more information on the 12 month budget model.
By: Rhys Campbell
About the Author:
Rhys Campbell is a qualified Chartered Accountant residing in Australia, with over 16 years experience in the finance / commerce industry worldwide. http://www.easy-budgeting.com
Clint Mcgrain
Sample Budgets: Compare Yours!
Many people learn best by example; you may be one of them. The following sample household budgets are intended to show a couple of simple approaches to recording a budget. The important thing to realize about these is that there is no one right way to do a budget. Some people are afraid of not doing their budget the ‘right way’ or that if they make a mistake, there will be dire consequences. Nothing could be further from the truth – the only wrong way to do a budget is to not do one at all. Trying to create a budget and not getting it exactly right or accurate is far better and more useful than not trying at all. Creating a budget is an iterative process and there is no school teacher that is going to scold you and give you a bad grade if it’s not perfect. So, let’s dive right in and take a look at our first sample household budget.
Our first sample budget is for a single female, just out of college. We’ll call her Sara. Sara has a paid for, used car that she received as a graduation present, a new apartment for which she just signed a lease, two credit cards she got while in college, a full-time graphic artist job at a sign company, and a cat. She sits down with a pen and paper and carefully comes up with the following monthly budget:
Income: $984, every two weeks (take-home pay)
Expenses, per month…
Rent: $1050
Electricity: $100
Internet/TV: $79.53
Car, gas: $80 Car, oil $10
Car, repairs $100
Car, insurance $106.23
Acme Debt Card: $79
YouOus Card: $54
Fluffy (shots, food, etc.): $60
Groceries: $150
Sara decides to play it safe and figures her normal monthly income, for the purposes of her budget, as just two pay periods per month (even though two months out of the year she will get 3.): 984×2 = $1968 and then she subtracts her total estimated monthly expenses of: 1868.76. Whew! She has 99 bucks left over; just enough to go out a few times to happy hour with her friends and cover a couple of miscellaneous items (clothes?) that pop up. Her health insurance is automatically deducted from her paycheck, and she figures the two extra paychecks per year will help cover vacations or emergencies (shoes perhaps?) that may occur. Not too bad. Let’s take a look at another budget example…
For our second sample budget, John and Carla are a married couple with two boys. John is a utility supervisor who takes home $1462 twice a month. Carla makes about $400/month selling hand-painted pottery online. John drives his work truck during the week and the family shares a minivan. Several years ago, they bought a small 3 bedroom house in a nice neighborhood and they have just one credit card they keep for emergencies. While John is at work, Carla works up the following in a spreadsheet on their home computer, by allocating all their funds to appropriate categories for their family:
Monthly
Our Income: $3324
Our Expenses:
Mortgage: $950
Utility company: $209
Internet: $49
Satellite TV: $49
Van payment: $320
Van (gas, oil, etc.): $140
Van Insurance: $127
Groceries, etc.: $500
Home repair fund: $100
Life Insurance: $79
Rainy Day Savings: $100
Clothes: $100
Boys’ college fund: $207
Entertainment: $114
Christmas and birthdays: $100
Investment: $100
Charity: $80
As a city employee, John receives excellent health benefits for the whole family, so Carla leaves medical expenses out of their budget. She has wisely allocated funds for emergencies, Christmas and birthdays, as well as long term investment in addition to what John is already contributing to his investment plan through work. John and Carla have also wisely avoided excessive debt – limiting their borrowing to just their house and vehicle. And they save considerable money by eating at home most of the time.
In both of these examples, our budgeters did what works for them. There is no one right or wrong way to create a budget. Getting bogged down by details can sometimes abort your budget before you finish. So, when starting out to create a budget, keep it simple. As you get better at estimating items in your budget, you can increase or further decrease the level of detail as you see fit after reviewing your actual spending from time to time. Your budget is a ‘best guess’ at what you think can work for your personal finances – a written goal that we strive towards, but don’t always expect to perfectly meet. Hopefully, these simple household budgets have illustrated that a good budget need be nothing more than a simple list of your income and expenses, catered to your unique financial situation.
By: Brad Homer
About the Author:
Our first sample budget is for a single female, just out of college. We’ll call her Sara. Sara has a paid for, used car that she received as a graduation present, a new apartment for which she just signed a lease, two credit cards she got while in college, a full-time graphic artist job at a sign company, and a cat. She sits down with a pen and paper and carefully comes up with the following monthly budget:
Income: $984, every two weeks (take-home pay)
Expenses, per month…
Rent: $1050
Electricity: $100
Internet/TV: $79.53
Car, gas: $80 Car, oil $10
Car, repairs $100
Car, insurance $106.23
Acme Debt Card: $79
YouOus Card: $54
Fluffy (shots, food, etc.): $60
Groceries: $150
Sara decides to play it safe and figures her normal monthly income, for the purposes of her budget, as just two pay periods per month (even though two months out of the year she will get 3.): 984×2 = $1968 and then she subtracts her total estimated monthly expenses of: 1868.76. Whew! She has 99 bucks left over; just enough to go out a few times to happy hour with her friends and cover a couple of miscellaneous items (clothes?) that pop up. Her health insurance is automatically deducted from her paycheck, and she figures the two extra paychecks per year will help cover vacations or emergencies (shoes perhaps?) that may occur. Not too bad. Let’s take a look at another budget example…
For our second sample budget, John and Carla are a married couple with two boys. John is a utility supervisor who takes home $1462 twice a month. Carla makes about $400/month selling hand-painted pottery online. John drives his work truck during the week and the family shares a minivan. Several years ago, they bought a small 3 bedroom house in a nice neighborhood and they have just one credit card they keep for emergencies. While John is at work, Carla works up the following in a spreadsheet on their home computer, by allocating all their funds to appropriate categories for their family:
Monthly
Our Income: $3324
Our Expenses:
Mortgage: $950
Utility company: $209
Internet: $49
Satellite TV: $49
Van payment: $320
Van (gas, oil, etc.): $140
Van Insurance: $127
Groceries, etc.: $500
Home repair fund: $100
Life Insurance: $79
Rainy Day Savings: $100
Clothes: $100
Boys’ college fund: $207
Entertainment: $114
Christmas and birthdays: $100
Investment: $100
Charity: $80
As a city employee, John receives excellent health benefits for the whole family, so Carla leaves medical expenses out of their budget. She has wisely allocated funds for emergencies, Christmas and birthdays, as well as long term investment in addition to what John is already contributing to his investment plan through work. John and Carla have also wisely avoided excessive debt – limiting their borrowing to just their house and vehicle. And they save considerable money by eating at home most of the time.
In both of these examples, our budgeters did what works for them. There is no one right or wrong way to create a budget. Getting bogged down by details can sometimes abort your budget before you finish. So, when starting out to create a budget, keep it simple. As you get better at estimating items in your budget, you can increase or further decrease the level of detail as you see fit after reviewing your actual spending from time to time. Your budget is a ‘best guess’ at what you think can work for your personal finances – a written goal that we strive towards, but don’t always expect to perfectly meet. Hopefully, these simple household budgets have illustrated that a good budget need be nothing more than a simple list of your income and expenses, catered to your unique financial situation.
By: Brad Homer
About the Author:
Brad Homer offers free-to-try home budgeting software, a free debt management wizard and more articles like these at his website.
Kelly
To Get Out of Debt You Need a Budget
To get out of debt you need a budget. Many people think that budgeting is just a waste of time. But without a budget you have no idea where your money is going. A budget will help you stretch your money and track all your spending. Budgeting is a useful tool that should be used in your household every month. You will be surprised how much you spend on things you really don’t need and even more surprised how much you can save if you set up a budget you can live with.
Make a list of all your expenses and don’t leave anything out include everything. List expenses like rent or mortgage payment, utility bills, car payments, insurance payments, entertainment, car repairs, credit cards and everything else you can think of. Decide how much money you are left with at the end of each month to pay towards your debt. Are you charging your purchases instead of paying in cash or debit card? How often do you use your credit card on those insignificant purchases when you could have just as easily used cash or even your debit card? This raises your balances and costs you more money in interest. Use cash, check, or a debit card and save yourself some money. To get out of debt you need a budget you can live with.
Unsecured debt like credit cards with high interest rates are the first things you need to concentrate on and pay off. The ones with the smallest balance are the ones you want to work on first. The reason you want start with the small ones first is because cards with small balances are the easiest to pay off and it gives you a sense of accomplishment. When you start to see the balances go to zero it helps you stick to the budget. Once the small ones are done then you work on the big ones. To get out of debt you need a budget that you can save a little money for unforeseen expenses that happen from time to time.
The best budget in the world won’t work if you can’t stay on it because it is too Restrictive. To get out of debt you need a budget that will be easy to follow. Live on less money than you make, control your wants and make a budget you can live with. It all can be accomplished with a little discipline and the desire that you can get rid of debt in less time than you think. It’s a great feeling when you can live free of debt. You can do it, you just need to get started and the rest will be easy.
By: William Onedge
About the Author:
Make a list of all your expenses and don’t leave anything out include everything. List expenses like rent or mortgage payment, utility bills, car payments, insurance payments, entertainment, car repairs, credit cards and everything else you can think of. Decide how much money you are left with at the end of each month to pay towards your debt. Are you charging your purchases instead of paying in cash or debit card? How often do you use your credit card on those insignificant purchases when you could have just as easily used cash or even your debit card? This raises your balances and costs you more money in interest. Use cash, check, or a debit card and save yourself some money. To get out of debt you need a budget you can live with.
Unsecured debt like credit cards with high interest rates are the first things you need to concentrate on and pay off. The ones with the smallest balance are the ones you want to work on first. The reason you want start with the small ones first is because cards with small balances are the easiest to pay off and it gives you a sense of accomplishment. When you start to see the balances go to zero it helps you stick to the budget. Once the small ones are done then you work on the big ones. To get out of debt you need a budget that you can save a little money for unforeseen expenses that happen from time to time.
The best budget in the world won’t work if you can’t stay on it because it is too Restrictive. To get out of debt you need a budget that will be easy to follow. Live on less money than you make, control your wants and make a budget you can live with. It all can be accomplished with a little discipline and the desire that you can get rid of debt in less time than you think. It’s a great feeling when you can live free of debt. You can do it, you just need to get started and the rest will be easy.
By: William Onedge
About the Author:
We have many budget plans, systems and lots of free advice on how to become Debt Free. For more Info go to http://www.4debtfreelife.com
Hans Tanenbaum
Budget Is Not A Bad Word
Sit amongst a group of friends and associates and mention the word budget, and suddenly everyone has somewhere else they need to be. Usually no one wants to talk about budgets, no one wants to think about budgets, and no one wants to follow a budget. However, when looked at with open eyes a budget is actually a fantastic thing. Here are three reasons why budget may become your favorite word:
Reason #1: A budget puts you in control of your money instead of your money controlling you. What did you spend your last $100 on? You may not remember. Maybe it was a pizza, or stickers for your children, maybe it went to piano lessons or a new pair of boots. The point is, many people have no idea where their money goes. When you set, and follow, a realistic budget your cash is freed up so you can spend your money on things that are important to you and your family rather than spending it on purchases you won’t remember buying ten minutes later.
Reason #2: A budget can improve your relationships. There’s little worse than the stress money can cause. Debt causes tremendous stress and so does the fear that you won’t be able to pay your bills. It can ruin your health and it can destroy relationships. When you form a financial plan with your family you work together as a team to reach your goals. The lines of communication are opened and the stress is eliminated because you have a plan and a team of support. Additionally, when you’re all on the same page financially there are no arguments about money, which makes better relationships with your spouse and your children.
Reason #3: Most people would agree that it is better to live within your means than to get into debt. However, some people don’t realize they’re living beyond their means until it is too late and the debt has become overwhelming and stressful. A sound budget keeps you living within your means and prevents or eliminates debt. A structured and realistic budget prevents the ‘Oops I spent too much on my credit card this month’ mistake that we often make month after month until we’re paying more on our minimum balance than on our mortgage. If this applies to you, don’t let it get to this point. Take advantage of the power of a budget and gain control over your financial life.
There is absolutely no downside to forming a budget and we’ve only scratched the surface of the benefits they provide. Take a few minutes to realistically analyze your spending habits, your income, and your financial goals. I promise you’ll be glad you did.
By: Eddie Lamb
About the Author:
Reason #1: A budget puts you in control of your money instead of your money controlling you. What did you spend your last $100 on? You may not remember. Maybe it was a pizza, or stickers for your children, maybe it went to piano lessons or a new pair of boots. The point is, many people have no idea where their money goes. When you set, and follow, a realistic budget your cash is freed up so you can spend your money on things that are important to you and your family rather than spending it on purchases you won’t remember buying ten minutes later.
Reason #2: A budget can improve your relationships. There’s little worse than the stress money can cause. Debt causes tremendous stress and so does the fear that you won’t be able to pay your bills. It can ruin your health and it can destroy relationships. When you form a financial plan with your family you work together as a team to reach your goals. The lines of communication are opened and the stress is eliminated because you have a plan and a team of support. Additionally, when you’re all on the same page financially there are no arguments about money, which makes better relationships with your spouse and your children.
Reason #3: Most people would agree that it is better to live within your means than to get into debt. However, some people don’t realize they’re living beyond their means until it is too late and the debt has become overwhelming and stressful. A sound budget keeps you living within your means and prevents or eliminates debt. A structured and realistic budget prevents the ‘Oops I spent too much on my credit card this month’ mistake that we often make month after month until we’re paying more on our minimum balance than on our mortgage. If this applies to you, don’t let it get to this point. Take advantage of the power of a budget and gain control over your financial life.
There is absolutely no downside to forming a budget and we’ve only scratched the surface of the benefits they provide. Take a few minutes to realistically analyze your spending habits, your income, and your financial goals. I promise you’ll be glad you did.
By: Eddie Lamb
About the Author:
Eddie Lamb owns LiveMortgageFree.com a website devoted to helping homeowners, first time buyers or tenants. You’ll get your own exclusive access to the program and bonuses that will get you on the road to living Mortgage Free and will change the way you view money forever. For more information visit: LiveMortgageFree
Cortez Fuchser
Saving Money and Finding a Personal Budget That Works for You
Get tips to save money and develop a personal budget that really works for you. Money saving tips include recognizing when and how household budgets are likely to fail, tips to keep budgets on track and ways to save more money and organize monthly bills.
Money Saving Tips: Creating a Personal Budget
There are some money saving tips you can use to make your personal budget really work. Household budgets often fail because the family trying to track expenses and plan for the future simply gives up. It’s important to recognize from the beginning that maintaining a personal budget is stressful, difficult and not a perfect process. Keeping realistic goals with regular expenditures in mind can also help you save money. Understand it will take time to get used to a new household budget and don’t let mistakes or occasional bloopers deter you from your goals.
More Money Saving Tips that Make a Household Budget Work
In addition to making room in your life for a personal budget, money-saving tips include thinking about short-term goals in addition to long-term goals. It’s important to include buying a new (or used) car in your budget over the next five years. Including exact costs for vacations, weddings, birthdays and other recreational expenses can be hard to do, so focus on estimating expenses to stay on track with your long-term goals.
Ease Household Budget Woes with a Balance Transfer Credit Card
Ease household budget problems with a balance transfer credit card. These cards are designed to reduce high interest debt. Use a balance transfer credit card or a low interest credit card to improve household budget results. High interest debt can be a killer over time. You’ll save money in the short term with reduced monthly bills. Transferring balances to a low interest credit card can also help track monthly household budget expenses, since there are fewer bills to pay.
By: Lisa Nichols
About the Author:
Money Saving Tips: Creating a Personal Budget
There are some money saving tips you can use to make your personal budget really work. Household budgets often fail because the family trying to track expenses and plan for the future simply gives up. It’s important to recognize from the beginning that maintaining a personal budget is stressful, difficult and not a perfect process. Keeping realistic goals with regular expenditures in mind can also help you save money. Understand it will take time to get used to a new household budget and don’t let mistakes or occasional bloopers deter you from your goals.
More Money Saving Tips that Make a Household Budget Work
In addition to making room in your life for a personal budget, money-saving tips include thinking about short-term goals in addition to long-term goals. It’s important to include buying a new (or used) car in your budget over the next five years. Including exact costs for vacations, weddings, birthdays and other recreational expenses can be hard to do, so focus on estimating expenses to stay on track with your long-term goals.
Ease Household Budget Woes with a Balance Transfer Credit Card
Ease household budget problems with a balance transfer credit card. These cards are designed to reduce high interest debt. Use a balance transfer credit card or a low interest credit card to improve household budget results. High interest debt can be a killer over time. You’ll save money in the short term with reduced monthly bills. Transferring balances to a low interest credit card can also help track monthly household budget expenses, since there are fewer bills to pay.
By: Lisa Nichols
About the Author:
Lisa Nichols is a freelance writer, website content strategist and marketing and PR strategy consultant. Originally from Eugene, Oregon, Lisa is currently based in Covington, Kentucky (also known as greater Cincinnati, Ohio).
Soraya Ximenez
The Easy Way To Family Budgeting
For some, the idea of a budget is often a blur. It is frustrating to see how hard it is to do a budget and realizing that with one wrong purchase, you can actually ruin the entire thing. And this has been a perennial headache for most homemakers.
It is about time to overhaul the way people look at budgeting. It can actually be a great way to keep track of your family’s expenditures and help you evaluate the things that you spend the lion’s share of the family’s earnings on.
What is a budget? A budget is a tool for handling your finances by controlling the family’s expenditures in a way that money is enough for paying up bills, and still ensuring that savings are set aside for future expenses – vacations, or children’s education, or even for retirement.
Try these simple steps in preparing a no fret family budget, and see the benefits of intelligent spending.
1.Gather three months of your pay stubs and get your average monthly earnings.
2.Get out three months of your monthly bills. Do this for the fixed expenses like the rent, phone bill, car payments and other loans that come monthly. Add them up and get the average. Do the same for other expenses like groceries, and credit card bills.
3.Evaluate the results of your computations. Looking at your average monthly earnings against your monthly fixed expenses and other monthly expenses, think of some ways to economize. Cut back on some items that are somehow unnecessary.
4.Knowing the facts of your income and expenses, develop a family budget and try to stick to this monthly budget.
5.Now that you have a monthly budget, set up a savings account. Save up by making regular deposits to this account.
6.Keep track of this monthly family budget just to see if it is working for you. Try to fine-tune the “rough edges” of this budget as you go along.
7.If you can get hold of a personal budgeting software or spreadsheet application to keep record of your budget, the better. This will make organizing your expenses very easy.
These are the basic steps in developing and implementing a no fret, easy to stick to monthly family budget. Of course each family has diverse needs and wants.
You have the freedom to develop your own monthly family budget, depending on your family’s financial background and needs.
No matter how you do it, just focus on the end result, which is building a savings that leads to a bright and financially stable future for your family.
By: Paul Hata
About the Author:
It is about time to overhaul the way people look at budgeting. It can actually be a great way to keep track of your family’s expenditures and help you evaluate the things that you spend the lion’s share of the family’s earnings on.
What is a budget? A budget is a tool for handling your finances by controlling the family’s expenditures in a way that money is enough for paying up bills, and still ensuring that savings are set aside for future expenses – vacations, or children’s education, or even for retirement.
Try these simple steps in preparing a no fret family budget, and see the benefits of intelligent spending.
1.Gather three months of your pay stubs and get your average monthly earnings.
2.Get out three months of your monthly bills. Do this for the fixed expenses like the rent, phone bill, car payments and other loans that come monthly. Add them up and get the average. Do the same for other expenses like groceries, and credit card bills.
3.Evaluate the results of your computations. Looking at your average monthly earnings against your monthly fixed expenses and other monthly expenses, think of some ways to economize. Cut back on some items that are somehow unnecessary.
4.Knowing the facts of your income and expenses, develop a family budget and try to stick to this monthly budget.
5.Now that you have a monthly budget, set up a savings account. Save up by making regular deposits to this account.
6.Keep track of this monthly family budget just to see if it is working for you. Try to fine-tune the “rough edges” of this budget as you go along.
7.If you can get hold of a personal budgeting software or spreadsheet application to keep record of your budget, the better. This will make organizing your expenses very easy.
These are the basic steps in developing and implementing a no fret, easy to stick to monthly family budget. Of course each family has diverse needs and wants.
You have the freedom to develop your own monthly family budget, depending on your family’s financial background and needs.
No matter how you do it, just focus on the end result, which is building a savings that leads to a bright and financially stable future for your family.
By: Paul Hata
About the Author:
1000s of Finance,Financing,Financial and Funding Services -
WorldFinancePages.com,
WorldFinancingPages.com,
WorldFinancialPages.com and
WorldFundingPages.com
Alexander Metevelis
Tips For Creating A Business Budget
Creating a business budget is very similar to creating a personal budget. However there are some differences. When you own a business, taxes are not directly taken out of your income, which makes your income and any quarterly tax payments extra important to track. Having an accurate and realistic budget will help you make accurate spending decisions and make it easier to predict profits. Which means the more frequently you track you costs, the better.
Here are the recommended steps for creating your business budget:
Step 1: Determine how frequently you want to track your costs and income. Generally, it is advisable to choose every week or every month. At first it may seem like a time-consuming task to track and enter your spending every week, but it will pay off in the long run and as you become accustomed to it, you’ll find that it really only takes you a few minutes every week.
Step 2: Determine your expenses. This means your operating costs like your phone and web hosting fees, the costs of your taxes, the costs of outsourcing and the costs for marketing, publicity and so on. Make a list of all categories you anticipate having costs and all areas where you already know your expenses.
Step 3: Now the fun stuff! You get to predict your income. The best bet is to predict on the conservative side. That way if you have a bad month, your budget isn’t blown; however, when you have a good month, and you will have many good months, you’ll have extra money to work with.
Step 4: Track your expenses and income and review your budget often. Your budget isn’t set in stone. It is a living breathing thing that will change as your business changes. If you find you’re spending more in one category, make the adjustments in your budget. A business budget isn’t a diet or a strict regimen, it is a spending plan.
Step 5: Realize that in the beginning, it is likely that you’ll have more expenses than income. This is normal for most start up businesses. Track the difference between what you do spend in each category and what you planned on spending. This will help you predict the future and keep your budget realistic and accurate.
Budgeting your small business is good business. Without a budget you’re unable to make accurate predictions and keep your business profitable and going strong. If you’re serious about being a successful business owner, you can’t do without a business budget. The good news is, it doesn’t have to be difficult. A simple spreadsheet and a little time can make all the difference.
By: Eddie Lamb
About the Author:
Here are the recommended steps for creating your business budget:
Step 1: Determine how frequently you want to track your costs and income. Generally, it is advisable to choose every week or every month. At first it may seem like a time-consuming task to track and enter your spending every week, but it will pay off in the long run and as you become accustomed to it, you’ll find that it really only takes you a few minutes every week.
Step 2: Determine your expenses. This means your operating costs like your phone and web hosting fees, the costs of your taxes, the costs of outsourcing and the costs for marketing, publicity and so on. Make a list of all categories you anticipate having costs and all areas where you already know your expenses.
Step 3: Now the fun stuff! You get to predict your income. The best bet is to predict on the conservative side. That way if you have a bad month, your budget isn’t blown; however, when you have a good month, and you will have many good months, you’ll have extra money to work with.
Step 4: Track your expenses and income and review your budget often. Your budget isn’t set in stone. It is a living breathing thing that will change as your business changes. If you find you’re spending more in one category, make the adjustments in your budget. A business budget isn’t a diet or a strict regimen, it is a spending plan.
Step 5: Realize that in the beginning, it is likely that you’ll have more expenses than income. This is normal for most start up businesses. Track the difference between what you do spend in each category and what you planned on spending. This will help you predict the future and keep your budget realistic and accurate.
Budgeting your small business is good business. Without a budget you’re unable to make accurate predictions and keep your business profitable and going strong. If you’re serious about being a successful business owner, you can’t do without a business budget. The good news is, it doesn’t have to be difficult. A simple spreadsheet and a little time can make all the difference.
By: Eddie Lamb
About the Author:
Eddie Lamb owns LiveMortgageFree.com a website devoted to helping homeowners, first time buyers or tenants. You’ll get your own exclusive access to the program and bonuses that will get you on the road to living Mortgage Free and will change the way you view money forever. For more information visit: LiveMortgageFree
Craig Apple
Why Isn’t your Budget Working?
Have you created a budget, only to throw it out within a week or two? So many people take the time to start their budgeting — excited to make changes to their life — only to throw them out the window in a few weeks.
Every New Years, people promise to change their finances. But as soon as February rolls around, they’ve already fallen off course. Why are their budgets failing?
The main causes of budget failure actually start before you even sit down to prepare a budget. By being aware of these budgeting land mines, you can effectively avoid them and successfully budget your way to financial freedom.
The first cause of budget failure is all in the attitude. Have you ever heard that with a change of attitude comes a change of your entire world? This is true. A positive attitude about budgeting and financial change is essential to the success of your financial plan.
You have to stop thinking in negative terms. Do you think of budgeting as limiting you from purchasing the things you want? Is it a financial diet? Is it a big sacrifice that you must make?
Stop thinking that way. It is just setting yourself and your budget up for guaranteed failure. You have to look at what your budget is giving you — financial freedom. The ability to live well and have the things you want. Fewer bills each month. Less debt. More security. Retirement. All of these things are wonderful to work towards.
Think of your budgeting as getting you where you want to go. Yes, you may have to postpone some spending right now, but that will pay off greatly in the long run. Just stay focused on your goals and how much they mean to you.
If you don’t have the motivation to keep budgeting, you will forget to do it. If you are only doing it because I’m telling you to, it isn’t going to work. You have to have real reasons that mean something to you in order to succeed. The best motivations are your goals. By budgeting you can meet these goals. Keep your goals where you can see them. Review your budget often to make sure that you are staying on track.
Keep your budget in front of you on a daily basis. Don’t spend the time in creating it just to put it in a drawer and never pull it back out again.
When you budget, you have to be honest with yourself and reasonable in your expectations. What are you looking for out of your budget? If you think it is going to be an easy way to get lots of cash, you probably are a little off course. Budgeting will not magically transform your finances unless you put an effort into it. You have to stick with it over the long run. If you do, you will see progress towards your goals. But nothing is going to happen overnight.
Keep your goals reasonable as well. You shouldn’t expect that you can cut $200 off of your grocery spending in the first month you budget. Make small, easy steps that take you towards your larger goals. Budgeting is all about taking it step by step.
With a positive attitude, motivation and realistic expectations you are starting your budget out on the right foot. Know what is standing in the way of your budget and work to eliminate it.
By: Martin Lukac
About the Author:
Every New Years, people promise to change their finances. But as soon as February rolls around, they’ve already fallen off course. Why are their budgets failing?
The main causes of budget failure actually start before you even sit down to prepare a budget. By being aware of these budgeting land mines, you can effectively avoid them and successfully budget your way to financial freedom.
The first cause of budget failure is all in the attitude. Have you ever heard that with a change of attitude comes a change of your entire world? This is true. A positive attitude about budgeting and financial change is essential to the success of your financial plan.
You have to stop thinking in negative terms. Do you think of budgeting as limiting you from purchasing the things you want? Is it a financial diet? Is it a big sacrifice that you must make?
Stop thinking that way. It is just setting yourself and your budget up for guaranteed failure. You have to look at what your budget is giving you — financial freedom. The ability to live well and have the things you want. Fewer bills each month. Less debt. More security. Retirement. All of these things are wonderful to work towards.
Think of your budgeting as getting you where you want to go. Yes, you may have to postpone some spending right now, but that will pay off greatly in the long run. Just stay focused on your goals and how much they mean to you.
If you don’t have the motivation to keep budgeting, you will forget to do it. If you are only doing it because I’m telling you to, it isn’t going to work. You have to have real reasons that mean something to you in order to succeed. The best motivations are your goals. By budgeting you can meet these goals. Keep your goals where you can see them. Review your budget often to make sure that you are staying on track.
Keep your budget in front of you on a daily basis. Don’t spend the time in creating it just to put it in a drawer and never pull it back out again.
When you budget, you have to be honest with yourself and reasonable in your expectations. What are you looking for out of your budget? If you think it is going to be an easy way to get lots of cash, you probably are a little off course. Budgeting will not magically transform your finances unless you put an effort into it. You have to stick with it over the long run. If you do, you will see progress towards your goals. But nothing is going to happen overnight.
Keep your goals reasonable as well. You shouldn’t expect that you can cut $200 off of your grocery spending in the first month you budget. Make small, easy steps that take you towards your larger goals. Budgeting is all about taking it step by step.
With a positive attitude, motivation and realistic expectations you are starting your budget out on the right foot. Know what is standing in the way of your budget and work to eliminate it.
By: Martin Lukac
About the Author:
Martin Lukac http://www.MartinLukac.com , represents http://www.RateEmpire.com , an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com
Rolanda Sigel
Budgeting – Not Much Fun But Definitely Worthwhile
I don’t think there are many people who enjoy budgeting. As a matter of fact, for some people, budgeting is probably as much fun as doing your taxes. The good news is that budgeting, whilst not much fun is definitely worthwhile, leading to more savings, less debt and best of all less stress about your finances.
People often do not budget because they find it to be an easy process. Where do you start? What tools do I use? What do I budget for? These are very common questions and when you sit down and don’t know the answers to these questions, the easiest thing to do is nothing. Then come the usual excuses, budgeting, it’s too hard or budgeting, I’ll get around to that another time. Let me tell you, if you get past the initial hurdles and understand how to budget, your finance fortunes will be better off.
It would far to say, that people do not fully understand how much they spend until they understand how much they spend. That may sound a little strange but if you read it again and think about it, it does make sense.
If you don’t sit down and complete a budget, how do you really know where your money is going every pay period? Do you really know how much you’re saving or more importantly whether you’re spending more than you earn? Nowadays, it is common place for people to live beyond their means because they have credit cards which allows it…..then the banks charge big interest rates for the privilege of letting you get deeper and deeper into debt.
How many people get to the end of their pay period, “hanging out” for their next pay day – this is not a good way to live your life and will mean you will continue to be controlled by your finances instead of controlling your finances.
People who are financially successful in life usually have strong control over their finances and understand how they spend their well earned money. People who are able to save are usually able to reduce their mortgages quicker, don’t have high credit cards debts and enjoy a higher level of disposable income and definitely less stress.
Imagine reducing the time in takes to pay off your mortgage by 5 years – what would that mean to you? Here are a couple of examples to illustrate how you can reduce the term of your mortgage by 5 years and the amount of interest you’ll save in the process:
Example 1
Loan amount $300,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $533
Total interest payable $393,482
Additional weekly payment to reduce loan by 5 years $45
Interest payable on 20 year loan $301,165
Interest saved $92,317
Example 2
Loan amount $400,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $711
Total interest payable $524,642
Additional weekly payment to reduce loan by 5 years $60
Interest payable on 20 year loan $401,554
Interest saved $123,088
Example 3
Loan amount $500,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $889
Total interest payable $655,803
Additional weekly payment to reduce loan by 5 years $74
Interest payable on 20 year loan $501,942
Interest saved $153,861
If you sat down a made a budget, I’m sure you could find a way to reduce your spending on certain items by $45 or $60 or $74 to ensure you reduce your loan term by 5 years and save $92,317 or $123,088 or $153,861 in interest.
Savings money each week doesn’t happen by itself and until you understand exactly what you spend your money on, you won’t have the opportunity to cut back. Listing all your income and expenses can actually be a scary process and something you may not entirely enjoy (it may indicate you are currently living outside your means!) but as you can see from the interest savings listed above, it is definitely worth it.
If you’re struggling with budgeting and need some assistance, www.easy-budgeting.com has an easy to use budget planner available for downloading and provides tips, guidance on budgeting to assist with the budget process.
Remember, budgeting is the first step towards taking control of your finances.
By: Rhys Campbell
About the Author:
People often do not budget because they find it to be an easy process. Where do you start? What tools do I use? What do I budget for? These are very common questions and when you sit down and don’t know the answers to these questions, the easiest thing to do is nothing. Then come the usual excuses, budgeting, it’s too hard or budgeting, I’ll get around to that another time. Let me tell you, if you get past the initial hurdles and understand how to budget, your finance fortunes will be better off.
It would far to say, that people do not fully understand how much they spend until they understand how much they spend. That may sound a little strange but if you read it again and think about it, it does make sense.
If you don’t sit down and complete a budget, how do you really know where your money is going every pay period? Do you really know how much you’re saving or more importantly whether you’re spending more than you earn? Nowadays, it is common place for people to live beyond their means because they have credit cards which allows it…..then the banks charge big interest rates for the privilege of letting you get deeper and deeper into debt.
How many people get to the end of their pay period, “hanging out” for their next pay day – this is not a good way to live your life and will mean you will continue to be controlled by your finances instead of controlling your finances.
People who are financially successful in life usually have strong control over their finances and understand how they spend their well earned money. People who are able to save are usually able to reduce their mortgages quicker, don’t have high credit cards debts and enjoy a higher level of disposable income and definitely less stress.
Imagine reducing the time in takes to pay off your mortgage by 5 years – what would that mean to you? Here are a couple of examples to illustrate how you can reduce the term of your mortgage by 5 years and the amount of interest you’ll save in the process:
Example 1
Loan amount $300,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $533
Total interest payable $393,482
Additional weekly payment to reduce loan by 5 years $45
Interest payable on 20 year loan $301,165
Interest saved $92,317
Example 2
Loan amount $400,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $711
Total interest payable $524,642
Additional weekly payment to reduce loan by 5 years $60
Interest payable on 20 year loan $401,554
Interest saved $123,088
Example 3
Loan amount $500,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $889
Total interest payable $655,803
Additional weekly payment to reduce loan by 5 years $74
Interest payable on 20 year loan $501,942
Interest saved $153,861
If you sat down a made a budget, I’m sure you could find a way to reduce your spending on certain items by $45 or $60 or $74 to ensure you reduce your loan term by 5 years and save $92,317 or $123,088 or $153,861 in interest.
Savings money each week doesn’t happen by itself and until you understand exactly what you spend your money on, you won’t have the opportunity to cut back. Listing all your income and expenses can actually be a scary process and something you may not entirely enjoy (it may indicate you are currently living outside your means!) but as you can see from the interest savings listed above, it is definitely worth it.
If you’re struggling with budgeting and need some assistance, www.easy-budgeting.com has an easy to use budget planner available for downloading and provides tips, guidance on budgeting to assist with the budget process.
Remember, budgeting is the first step towards taking control of your finances.
By: Rhys Campbell
About the Author:
Rhys Campbell is a qualified Chartered Accountant residing in Australia, with over 16 years experience in the finance / commerce industry worldwide and is the creator of http://www.easy-budgeting.com.
Lessie Sopczak