Have you ever wished to make a start on setting up a home budget but were not sure how to start? Couldn't work out how to do the calculations and were not sure whether the answer would be correct? No more reason to stall. Use a pre-formatted spreadsheet that you only have to enter your financial income and expenses into. There are many of these available on the Internet. Ready to look at the benefits? Let’s go.
Benefit #1. A spreadsheet clearly shows your thinking and the calculations used to arrive at the answer. What's more, it allows you to add extra items quickly and see their impact on your financial position, or your free spending amount.
Benefit #2. A spreadsheet can be quickly and easily copied and the data changed to suit a friend or another member of the family. Maybe a teen's budget or a hobby budget could be started using the same initial template. You could also easily copy one month's budget and reproduce it 11 more times to last for a whole year.
Benefit #3. A spreadsheet can be printed and taken with you for further study, or passed on to members of the family for their input.
Benefit #4. A spreadsheet allows for "What If" questions to be asked of it. For instance, what if you were to reduce the spending on clothes and add some extra funds to credit card payments and/or holiday savings? The answer to this question could be instantly calculated by just changing 2 or 3 numbers.
Benefit #5. A spreadsheet can teach you a new, very marketable skill. You may find you pick up this skill really quickly and want to add more elements to the budget like graphs, personalized formatting and more calculations. A spreadsheet is really only a calculator, but with a lot more flexibility. Setting up a budget for yourself, is a good place to start, since this is an easy project. You could progress on to building a Savings Growth Calculator, a Retirement Goal Calculator or a hobby expense and income sheet, and the list goes on. Spreadsheets are used everywhere in the finance, marketing, teaching, manufacturing and sales functions in many businesses worldwide.
Benefit #6. A spreadsheet can improve your accuracy. If you have set up the spreadsheet correctly, you can be sure that that the answers provided are correct, time after time. It's easy to see the formulae used and to check their correctness. Others can check these for you also, if you need some help in this area.
Benefit #7. A spreadsheet allows for easy changes to be made to your assumptions and data, as your circumstances change over time. Let's say you receive a substantial pay raise? No worries. Just adjust the income numbers and the new answer falls out. What if you wish to spend less on some item for a month and apply these savings to another expense item or save a little more? Not a problem. Just change the required data and the answer is immediately available.
If you want your budget preparation task to be as simple as possible don't waste your valuable time with scraps of paper and a calculator. Use the tool that will save you time and hassle, the spreadsheet.
Bruce Hokin has designed a simple budget tool called "5 Steps to Freedom Personal Budget" It's based on his extensive background as a qualified, experienced accountant, manager, consultant and financial adviser. You can download this powerful budget assistant today and be on your way to financial freedom within the hour. You don't even need Excel - world-class spreadsheet software is already included. Pay only a fraction of the Excel cost for the complete package. Get 6 FREE bonuses as well. To check out this amazing offer, click on this link. Complete Personal Budget Package.
Thursday, July 19, 2007
How to Make a Start on Your Personal Budget in 6 Easy Steps
You're a grown adult. Right? How is it then, that this most basic of tasks - the personal budget, has you cowering in the corner afraid of a bunch of papers? It's only a pile of papers that you will knock into shape with a pen, a pad, a calculator and a little determination. Let's get right to it, shall we?
Easy Step #1. Get those documents into some order.
Go to the drawer, find all the latest credit card statements, the store card statements and the outstanding balance on that personal loan. Get all the bills, the correspondence and other notices and put them in a pile. Now go through each piece of paper and consign it to 1 of 3 piles. TRASH, BILLS, CORRESPONDENCE. Be an adult, get angry and just do it.
Easy Step #2. Categorize the BILLS (not house or car debt)
Go to the BILLS pile and separate the documents into household bills and credit cards/loans. The utilities, phone, local council rates and other regular bills need to be sorted as to their due dates and paid as best you can manage. You may have to forfeit some entertainment and some meals eaten out for a while - just accept it, until these are brought up to date and under control.
Easy Step #3. Work on the Credit Cards and Loans
The credit card and loans are treated a little differently since only a minimum payment is required and you have some degree of freedom with your payment amounts. Add up all the outstanding balances for credit cards and other loans. Once that is done, make a pact with yourself to pay down these amounts as quickly as possible both in terms of money and time frame.
Easy Step #4. Look at your income and spending.
Now that you have a handle on the household bills and the credit card/loans amounts, it's time to compare your income and spending. This is where a pre-formatted simple spreadsheet can help (but not necessary if you haven't used one before). Firstly, add up all forms of income (cash in) for a month - salary (less taxes), interest, other income. Secondly, list out all your expenditure (cash out) for the month.
You won't have this data at hand, today, I know. Short of waiting a whole month to get really accurate data you could estimate your spending to your best ability. Don't leave any thing out. Include the cigarettes, drinks, gambling, bought coffees, meals out, everything. Now minus your spending from your income and check out the balance.
Easy Step #5. Allocate the free balance to those unpaid bills and credit card/loan amounts.
Allocate the free balance to the bills and the credit card/loans repayments. If there is not enough free cash to pay them all as they fall due you have 3 options. Spend less, earn more or a combination of both. It's that simple.
Easy Step #6. Commit to Spending Less - Live Within Your Means
You did not get into this mess overnight. Likewise you won't be able to get out immediately - it will take a little time.
Review your spending items and work out ways to spend less. There are many resources available to help at your local library or on the 'Net.
That's it in a nutshell. Face up to the challenge, do the math, make the commitment. Looking back, you'll be so thankful you made the effort.
Bruce Hokin has designed a simple budget tool called "5 Steps to Freedom Personal Budget" It's based on his extensive background as a qualified, experienced accountant, manager, consultant and financial adviser. You can download this powerful budget assistant today and be on your way to financial freedom within the hour. You don't even need Excel - world-class spreadsheet software is already included. Pay only a fraction of the Excel cost for the complete package. Get 6 FREE bonuses as well.Complete Personal Budget Package.
Easy Step #1. Get those documents into some order.
Go to the drawer, find all the latest credit card statements, the store card statements and the outstanding balance on that personal loan. Get all the bills, the correspondence and other notices and put them in a pile. Now go through each piece of paper and consign it to 1 of 3 piles. TRASH, BILLS, CORRESPONDENCE. Be an adult, get angry and just do it.
Easy Step #2. Categorize the BILLS (not house or car debt)
Go to the BILLS pile and separate the documents into household bills and credit cards/loans. The utilities, phone, local council rates and other regular bills need to be sorted as to their due dates and paid as best you can manage. You may have to forfeit some entertainment and some meals eaten out for a while - just accept it, until these are brought up to date and under control.
Easy Step #3. Work on the Credit Cards and Loans
The credit card and loans are treated a little differently since only a minimum payment is required and you have some degree of freedom with your payment amounts. Add up all the outstanding balances for credit cards and other loans. Once that is done, make a pact with yourself to pay down these amounts as quickly as possible both in terms of money and time frame.
Easy Step #4. Look at your income and spending.
Now that you have a handle on the household bills and the credit card/loans amounts, it's time to compare your income and spending. This is where a pre-formatted simple spreadsheet can help (but not necessary if you haven't used one before). Firstly, add up all forms of income (cash in) for a month - salary (less taxes), interest, other income. Secondly, list out all your expenditure (cash out) for the month.
You won't have this data at hand, today, I know. Short of waiting a whole month to get really accurate data you could estimate your spending to your best ability. Don't leave any thing out. Include the cigarettes, drinks, gambling, bought coffees, meals out, everything. Now minus your spending from your income and check out the balance.
Easy Step #5. Allocate the free balance to those unpaid bills and credit card/loan amounts.
Allocate the free balance to the bills and the credit card/loans repayments. If there is not enough free cash to pay them all as they fall due you have 3 options. Spend less, earn more or a combination of both. It's that simple.
Easy Step #6. Commit to Spending Less - Live Within Your Means
You did not get into this mess overnight. Likewise you won't be able to get out immediately - it will take a little time.
Review your spending items and work out ways to spend less. There are many resources available to help at your local library or on the 'Net.
That's it in a nutshell. Face up to the challenge, do the math, make the commitment. Looking back, you'll be so thankful you made the effort.
Bruce Hokin has designed a simple budget tool called "5 Steps to Freedom Personal Budget" It's based on his extensive background as a qualified, experienced accountant, manager, consultant and financial adviser. You can download this powerful budget assistant today and be on your way to financial freedom within the hour. You don't even need Excel - world-class spreadsheet software is already included. Pay only a fraction of the Excel cost for the complete package. Get 6 FREE bonuses as well.Complete Personal Budget Package.
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