S.T.E.P.S. – Smart, Tailored, Event-Driven, Packaged Solutions
Developing a Budget — Part IX
Developing a sensible, personally customized budget will allow you to take control of your spending and make your financial life secure. You should allocate your incoming funds to satisfy your spending needs while continuing to protect your nest egg for retirement, your children’s education, to support your elderly parents, income from alimony or property settlements and so forth.
To start developing a budget, you need to figure out how much income you have. The next question is, “what do you spend each month?” This means scrutinizing your bills over the past year. Check your credit card statements, bank statements and phone bills. Divide your expenses into categories such as entertainment, autos, food, utilities, housing and analyze ways to trim costs. Cost of entertainment can be easy to shave. Housing and utility costs are typically more difficult to slash. Optional spending is another key area to focus on. These include haircuts, the gym and magazine subscriptions. Cast a hard eye on these expenses that you can easily pare back for the immediate time until you get your financial life in order.
Once you’ve listed all realistic expenses and sources of income, consider setting up an investment vehicle with the difference.
Continue to: Part X: Joining the workforce
In this course, we will cover the following: