#1 Basic Rule for Creating a Budget
Creating a budget can be made simple by following one basic rule.
What goes out, must come in - first.
It's that simple.
What goes out, must come in - first.
It's that simple.
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But somehow we seem to have a hard time trying to get around that one, simple rule.
And it lands us into trouble sooner or later.
Creating a budget may sound stuffy, but in many ways the benefits are not stuffy at all.
Creating a budget may sound stuffy, but in many ways the benefits are not stuffy at all.
It can allow you to stay home with your kids, and it can relieve a lot of financial pressure - which makes you and your family healthier and happier.
Taking The First Step
It is absolutely essential to look closely at your cash flow, what money is coming in and what money is going out. Simply list every penny of income you receive on a regular basis every month.
Next, list everything that you are committed to paying every month... this includes your mortgage, insurance, car payments, taxes, loans, utility bills like electricity, cable, groceries and water.
Taking The First Step
It is absolutely essential to look closely at your cash flow, what money is coming in and what money is going out. Simply list every penny of income you receive on a regular basis every month.
Next, list everything that you are committed to paying every month... this includes your mortgage, insurance, car payments, taxes, loans, utility bills like electricity, cable, groceries and water.
Don't forget to include a little wiggle room for unexpected costs like extra curriculars at school for the kids or things like car repairs.
Make a full list of everything that you absolutely must pay for every month. This does not include emergency trips to your local drive through :0)
These are your essential monthly costs.
Then simply take away your monthly costs from your monthly income.
Make a full list of everything that you absolutely must pay for every month. This does not include emergency trips to your local drive through :0)
These are your essential monthly costs.
Then simply take away your monthly costs from your monthly income.
The difference between these two amounts is you disposable cash or how much you have to spend on everything else. Of course this amount might actually be negative and this is actually more often the situation for many families where you suddenly realize you can't afford your living.
But don't worry because there are lots of things you can do to reduce the costs. The first place to start is on the list of items that you made for you essential monthly costs.
We all usually have a long list of essential monthly costs so if you can reduce each one by ten dollars here and twenty dollars there and it will eventually all add up to make a significant difference.
If you start now, sooner rather than later, you will be able to follow the #1 basic rule of creating a budget.
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But don't worry because there are lots of things you can do to reduce the costs. The first place to start is on the list of items that you made for you essential monthly costs.
We all usually have a long list of essential monthly costs so if you can reduce each one by ten dollars here and twenty dollars there and it will eventually all add up to make a significant difference.
If you start now, sooner rather than later, you will be able to follow the #1 basic rule of creating a budget.
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