Simple budgeting help
Okay, I’ll finish with one more tonight…
Budgeting. Book keeping. Accounts. For a business, they are essential, but many householders overlook this issue too easily - until it bites them in the face and they have to count every penny today, because they forgot to count every pound yesterday.
Here’s the bottom line: you need to know what your take-home earnings are each month (gross profit). Then you need to calculate all of your essential outogings, such as rent/mortgage, groceries, insurances, taxes, bills, etc. That leaves you with a net profit.
Most people don’t realise just how big their outgoings can be. Think about it, that coffee from the coffee machine a few times each day, those sandwiches in your break time, that magazine purchase on the way back from work…you probably just spent between £5-£10 on that weekday alone. That’s £150-£300 each month. And I bet you would have forgotten to count all those purchases.
Not sure how to work out your actual outgoings?
THE TIP: Spend one month paying for absolutely everything you spend on a credit card, then pay that balance off in full at the end of the month.
There, you just got a fair idea of your actual outgoings.
Don’t sit on that information, so something with it, such as start keeping book keeping records and keep them updated every week. Track your expenditure on a month to month basis, and watch out for simple ways to cut unnecessary costs to free up cash for quality spending and saving.
And if you’re not sure what software to use for budget your own accounts? You can get a good list of free financial tools from here and also here.
Bottom line is that it’s all in the details - details are everything. The more you have a handle on the details of your spend, the more you can ensure you don;t just waste money on silly purchases, and instead turn it around for spending on things that really matter, cutting your debts, and generally being more responsible with your personal finances.
Oh, and on that point, I never - ever - recommend anyone ever uses a credit card for credit. Consumer protection, yes. Convenience, yes. But always always always pay off the balance in full at the end of every month via direct debit.
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Hi Richmond
Aibek from makeuseo is here, I saw you linked to my site. I think following page may be helpful as well:
15 Free Tools for Budgeting and Expense Tracking
Thanks for the heads up on that. I like the lists you’re compiling.