creating an effective budget

creating an effective budget

Transcript

1. www.lifethenfinance.com Creating An Effective Budget
3. www.lifethenfinance.com The best way to acquire financial security is to have a sound budget.
4. www.lifethenfinance.com Creating Your Budget: Getting Started •  The backbone for your budget is how much money you make. •  Use your net income, not gross. •  Consider your tax refund as a bonus!
5. www.lifethenfinance.com Figuring Your Income Include income from: •  Your jobs •  Businesses you own •  Investments •  Alimony or child support payments •  Residual income, like rents or royalties •  Any other source of income
6. www.lifethenfinance.com Does Your Paycheck Vary? Determine your average monthly income: Total income from past 3-6 months Number of paychecks during that time Income Estimate
7. www.lifethenfinance.com Figuring Your Expenses Your expenses include: •  Fixed •  Variable •  Non-Essential
8. www.lifethenfinance.com What Are Fixed Expenses? ? ? ?
9. www.lifethenfinance.com Fixed Expenses Payments that are the same every month: •  House/rent payments •  Car payments •  Cable payments •  Loan payments •  And more
10. www.lifethenfinance.com What Are Variable Expenses? ? ? ?
11. www.lifethenfinance.com Variable Charges Payments that change each month: •  Groceries •  Gasoline •  Entertainment •  And more Tip: Use an average amount of each variable charge for your budget!
12. www.lifethenfinance.com What Are Non-Essential Expenses? ? ? ?
13. www.lifethenfinance.com Non-Essential Expenses Things that we want, but don`t necessarily need: •  Excessive amounts of clothing and shoes •  Eating out •  lStuffz you buy only because it`s on sale
14. www.lifethenfinance.com Self-Reflection Questions: •  How much do I spend every month? •  What are my variable charges? Can I reduce these? •  How much do I need to make in order to get by?
15. www.lifethenfinance.com Action Tips: •  Write down your income and expenses. •  Estimate your variable expenses. •  Cut down variable expenses in order to… Earn More Than You Spend!