Wednesday, December 15, 2010

My Take on the Houshold Budget AKA Spending plan

I believe deep down we would all like to have wealth. From my friends seven year old who says when I grow up I want to be rich. To us adults who would like to have enough money to have all of our needs met. The secret that noboby tells us til it is too late is that no matter how much you make you can always spend it. When I was younger and I got my first w2 in January from my employer and it said I made 18,000 dollars that year and I didn’t even save a dime. I vowed to do better and many years later I study money and how it works for my hobby. I am love to tell others all the money secrets I find along the way. I think it is a shame that we are not teaching our youth how to achieve wealth in there lifetimes. Another secret is to start young but what if they forgot to tell us till we are older. We teach nothing about how to handle money in our school Systems. Yet we are the richest nation on earth.


Building your house of wealth

Your foundation is to live within your income, stay out of debt, learn to keep your money and learn how to have it work for you.

To learn to stay within your income you need to have a budget, the new term is a spending plan.

Everything in your spending plan needs to fit in your take home income.


If it doesn’t you are in danger of going into debt to make up the difference and debt takes you money away from you and then your money can’t work for you.. It is working for them.

After writing your spending plan make sure it fits within your take home income it has to fit either by lowering your bills or you need to make more income. You may have to 2nd job to fill in the gap.

Then once you have a spending plan tweak it you might find some hidden money call all insurance companies and make sure you are not paying too much for your services. Companies will lower rates but do not tell their current customers about the changes it is kind of like if we don’t ask they don’t tell.

At least once a year we should dissect your budget to make sure you are not paying more than you need to for the same services.

On my personal spending plan I have what I am saving as well so I don’t forget to save some of the money I am making.

Here is an example of my budget sheet that I use, it is just missing the grid lines. At the bottom there is space to write three financial goals. Your goals could be to get something paid off in the next 6 months of to save more money. I revise my budget every six months and look at my goals and see if I am making progress or if I need to adjust my goals a little.

There is also an area for the once a year expenses like car tabs and the items my escrow pays for like my home insurance and my taxes.

Budget Sheet
Payment Jan Feb Mar April May Jun Jul Aug
Tithing/giving
House (due the 1st)
Elec/gas (due the 11th)
Water (due the 20th)
Trash
Daycare
Cell phone
Car ins
Phone
Cable
Internet
IRA or 401k
SAVINGS
COLLEGE
Aflec
loans
Gym membership

TOTAL TOTAL NEEDS TO BE BE LESS THAN YOUR INCOME Income_____________________
Taxes
Vehicle Tabs
House Ins

Financial goals
1
2
3

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