Cash-Flow Planning

Here is an excellent breakdown of the best way to create a budget from both your income and expenditure sides.

You need to make a fresh budget for each month. Every time that calendar changes, there are new birthdays, vacations, insurance statements, proms and so forth. There’s no one budget that’s perfect all of the time. Therefore, you need to make a fresh budget for every new month.

Budget should include:

− Pay Checks
− Income from other small businesses
− Part time jobs
− Residual income
− Freelance work
− Child support

There might be few other areas that we did not cover, but the overlying rule is this: Whenever you receive money during the month, write it in your income column.

If you’re married, don’t divide your incomes. The separate amount each of you earn every month is not important. What’s important is that you pull the two incomes together.

Outgoing Expenses

Budget HelpEvery expenditure you make each month have to be written down. Rent, telephones, cable, food and everything in between. Again, because you create a new spending plan every month, some months you will have expenditures while in some others, you will not. A gift budget may not be low in December but will, in April, or there may be car insurance due. Take it one month at a time. Never combine months.

Clear all the confusion. In the event you are perplexed about just how to categorize expenditures (does a restaurant visit count as “food” or “eating out”?), just find out what system works best for you. When you’ve got two categories which are clearly distinct (like gas cash and movies), you need to separate them. However, when you spend $100 at the grocery store purchasing food and things to run your home like shampoo and paper towels, you might put that all under “grocery.”

Start Early

Make your budget a few days before the month starts. People get dejected if it is August 6 and they never made the budget of August. Do not let the month sneak up on you without being prepared. You should have the budget of August ready by July 29.

Each time you purchase anything, write it down. Take 60 seconds when you get home from work to upgrade your budget. Be alert and do this little bit of work daily. You don’t want to open your wallet and find a week’s worth of receipt in there.

Everything Points to Zero

The point of every budget would be to make both the outgoings and incomings equal zero. They are supposed to cancel each other out. If you happen to find 500 bucks left after you have cancelled out all your expenses, the budget is not done yet. Make the most of that 500 bucks by investing it or saving it or maybe using to get out of debt. If you fell to do that, you miss on the opportunity of having your money work for you.

You should be in-charge of your finances by telling every dollar exactly where it had to go.

For help with getting control of your budget, contact