I don’t know about you but I always like to sit down and plan things as best I can and as early as I can. I find this is really important, especially as a single parent. Since I’ve started planning my year, I’ve been able to keep my budget and time in check . Here are some tips that you might find helpful.
According to E-Home Fellowship,
A good budget is a spending plan that includes everything you will spend money on and stays within your income. A wise budget includes everything you will spend money on, savings for a ‘rainy day’, savings for large purchases, giving, savings for kids, and investment for retirement and still stays within your income.
I think it is important to do this activity at the start of the year as it sets your expectations and gives you an idea bout how to deal with the coming events over the year. Plus, just remember the 5 Reasons You Should Save Half Your Income!
Get the whole picture. Start by collecting all checking account and credit card statements for the last year. Hopefully, you will have limited this or, as I have done, stuck to a strict cash or debit card only rule. Note any and all expenses you regularly make. If you keep receipts, this will help you a lot. If not, maybe you should start for recording purposes only.
Record the whole picture. Use all the stuff you collected to record a ‘picture’ of what you spent last year. This might be depressing or not but this is important to give you a good basis of comparison for the next budget.
Make sure you don’t double-list items. Check off the lines on your documents as you account for them in a budget item. this way, you also do not forget anything.
Note your net monthly salary, combined with any extra work you might be doing as well.
Create a monthly expenses worksheet.
Create a worksheet for non-monthly expenses like Insurance.
Include everything you regularly pay cash for in the Cash Budget-Monthly section.
After you total everything, you may be surprised to discover your expenses are larger than your income. This happens to everyone so do not fret. If you have a larger income figure than your expenses however, place this amount in your savings.
Review your budget worksheet. Check if you’ve listed expenses accurately then look to see if you are being too excessive with some items. Also check those items you anticipate will increase within the year and make your adjustments.
Try your best to have an emergency fund that equals around 6 months of your net income. After you’ve saved this amount, you cans start investing anything over.
After doing this you will find that you will be relieved to have a better picture of how your year will play out financially. While this is never a sure thing and while plans ALWAYS deviate in some way, you will probably stick to this basic picture for the next 12 months. You can also use this to plan anything extra you might want to do to earn more or to plan for points in the year when you know you will need to spend.
However you decide to go, let’s make 2011 a better year and the start of a better-budgeted decade.
How are you preparing for the new year? Are you doing anything different financially?