A personal financial budget is a money allocation plan which is part of your financial plan enabling you to outline your financial goals. Establishing a personal financial budget is not difficult and has tremendous payoffs. You can better establish and regulate your financial resources, set and achieve your financial objectives, and make advance decisions as to how you want your finances best to function for you.
The main idea in creating a personal financial budget is to put aside a certain amount of money for expected as well as unexpected costs, based on previous expenses and bills, as well as define savings amounts in its optimal state. It therefore enables you to position yourself to build wealth in the long-term. In order to create a useful personal financial budget as part personal financial planning you must do the following:
Step 1. Determine how to allocate your compensation by first identifying your spending habits. Define fixed expenses (e.g., home, auto, utilities, insurances, etc.) thoroughly for a month and write everything down and add it all up. Even if your utilities fluctuate a little you can estimate the cost after an average month. Through proper determination of your “spending patterns”, you can immediately identify solutions for creating an effective personal financial budget for your needs.
For instance, when you have a steady monthly net income (after tax take home pay) of $5,000, you should subtract all of your identified monthly expenses from that income – making a list of the regular monthly amounts. Spreadsheets are often useful for keeping track of this information. Many people often create an excel spreadsheet budget to track expenses. There can be benefits to creating multiple year personal financial budget plans.
Step 2. Next, assess other bills, like those that may occur periodically during the year. These can be estimated and then subtracted from the amount of your income. You have one of two ways of doing this. The first way is to compute the total for a year, divide the total by 12, and subtract that monthly amount by putting the money into savings to build until you need it. The second way is if you have enough surplus you can just budget the full annual, semiannual, or other bill in full or in some other payment arrangement.
Step 3. The balance that remained after fixed costs can now be budgeted across miscellaneous household expenses and savings. Budgeting for savings is often overlooked and therefore often will not get done. A short-term 2-5 year savings goal needs a minimum 2-year personal financial budget plan so you can see where you are going. A short-term impulse buying view is often what prevents people from accumulating savings and building wealth.
Step 4. To best determine how to ensure you contribute to savings, you can do this one of two ways. You could use dollar amounts for a group call miscellaneous like gas, clothing, entertainment and groceries. Some people promote using proportions or percentages. But think about it, if your income increases, does that mean your miscellaneous expenses should or should your savings increase instead? So, using dollar amounts instead of percentages could be advantageous to your savings goal.
Step 5. Ideally you have a minimum of 3 cash or banking accounts. These expenses should be allocated across 2 checking accounts – the first for paying bills and for transferring money to at least a second checking account and one savings account ( if you do not have direct deposit across all of these accounts). The second checking account would be for your household, miscellaneous, spending money and not the recurring bills. Then a third short-term savings/emergency account (later adding longer-term savings accounts of course) but these are beginning steps that many people never put into practice.
These are ways to establish a basic financial plan and to prevent usage of non-allocated money for miscellaneous or impulse expenses. These are beginning steps that many people never put into practice that are beneficial and can be built upon, for long-term financial planning.
Christian debt relief may not be a term that you are used to hearing, or perhaps you have heard it before. The difference between debt relief and Christian debt relief is simply that there is a spiritual quality involved, a principle that says you can’t be spiritually free if you are worrying and frustrated about money problems all the time and not devoting your mind and soul to God. The Christian way of life means living within your means and not being excessive, especially when you can’t afford it. Freeing yourself of your financial burden will also cause you to grow closer to God and become much happier with your life in general.
There are specific aspects of Christian debt relief such as the burden that financial debt brings. It is a lesson that you as a Christian must learn through suffering and hardship, but eventually salvation and financial freedom once you have called upon the right help and learned from your ways. The best way of life is a simple life which does not lead to excess spending and coveting. When we are careless with our money we put ourselves into tough positions that dictate our spiritual well-being as well as the well-being of our loved ones as well. Money is only physical and of this life yet it still holds a great importance and plays a huge part in the quality of our lives and the lives of those who depend on us.
The key to escaping this financial burden is lowering your interest rates and breaking down payments to monthly bills. We cannot truly serve the Lord if our minds wander elsewhere with sad thoughts of poverty and not being able to put our children through school and give them the things they deserve. By setting yourself free from your debt and poor spending habits, you are in a way ensuring yourself salvation in the next life as well. Certainly a large part of getting through these difficult times is praying and trusting that God has a plan for you, and although you may not be able to see how it will benefit you now, in the end it will all be clear.
Many of us have negative connotations associated to the word budget. We feel it is restricting, not allowing us the freedom to spend our hard earned money the way we choose. We view budget as something which needs to be done by those who are struggling financially. Budgeting, however, is a fundamental concept which must be adhered to if financial success is to be achieved. Having a budget is a common characteristic among those who have earned their financial success. The lack of a budget is a common theme, typically, among those who are struggling financially. Budgeting isn’t punishment for not being wealthy. A budget is a means to determine where your money is going, something we all need to be able to do. Creating a budget is a way to determine whether you are spending more than you make. At the heart of financial success is spending less than you make. You simply can’t spend more than you make, at least not for long. So, what are the basics? The two fundamental questions to answer when creating a budget are; “What’s going out?” and “What’s coming in?”
The place to start creating a budget is figuring out where your money is going right now. There are a number of ways this can be done. You have to discover what works for you. I have tried different approaches to tracking expenses, computer software, spreadsheets, notepad, and check register. I have found a simple excel spreadsheet works best for me. Easily customizable, spreadsheets do the calculations I need and I can input the information in a manner that best suits my needs. You can start inputting entries from bank statements, credit card statements or from where ever you can obtain the information for the budget. Track you spending for about a month. Adding up the amounts will give you a good idea about your spending habits. A few guidelines in setting up your spreadsheet are listed below:
o Typical categories are housing, food, recurring bills, and entertainment.
o Categories should fit your lifestyle. Include those areas of spending that are unique to you.
o Account for the once or twice a year expenses such as auto insurance and taxes.
The next area to address is what’s coming in. Determine your monthly income including wages, interest income, dividends, and bonuses. Once you know how much you make and how where you are spending the money, you’ve got a budget. Adjust the spending until you achieve balance between your income and expenses. Your goal with the spreadsheet is to fine tune it until you have a line item for all the income and all the expenses you incur. This fine tuning process will highlight areas of spending which may be out of your perceived spending plan. By having setup the budget you are now equipped to make the adjustments needed to bring about financial success.
The final step is to get into the habit of budgeting. To be successful this will take persistence. You will have a number of slip ups along the way. Don’t be discouraged by this. The goal is not perfection in record keeping, but, rather money management. Here are some tidbits to help you on your journey.
o If you can’t spend less to bring balance between income and expenses, earn more.
o Pay cash whenever possible and record the transaction.
o Develop a habit of thinking ahead. Plan for upcoming situations and prepare for it.
o Keep good records. If you don’t write it down, chances are you won’t stick to it.
o As your finances change so should your budget. View the budget as a living document that changes with you.
Creating a budget is advantageous when planning for your financial future. The budget is really a tool to determine spending patterns and habits. A budget is a way in which you can take control of cash flow. An excel spreadsheet or computer software can be a viable resource when creating a budget.
The typical American household budget percentage breakdown looks like the list below. For most of the categories a range is shown. A range makes more sense to help you see where your personal budget fits (or doesn’t fit.) If your budget doesn’t fit the typical American household budget, rejoice! The average American household budget is jacked up – we carry too much debt and we just don’t save enough. We’re so worried about our neighbor’s new pool, our co-worker’s new car and our friend’s new designer shoes that we spend more than we earn to try and keep up. But take heart! Review the percentages below, compare your household budget and then read on to find out how you can move yourself into the elite minority of Americans who have mastered where their money goes.
Typical Household Budget Percentages
33-38% Housing (59%-66% of this is on shelter – mortgage interest, property taxes, repairs, and rent, and other items) 15-19% Transportation (up to half of this is vehicle purchase – 2 cars per household average) 13-14% Food Budget (55% at home, 45% away) 0-2% Alcohol 0-3% Tobacco and related products 0-2% Caffeine related products 4-5% On clothing and related services (drycleaning) 4.5 – 6% on out of pocket Health Care 9% Personal Insurance and Pensions (breakdown: 1% life and other personal insurance, 7.5% Social Security, .5% investment 5% Entertainment 2.5% Charitable Contributions 2% Reading and Education 1% Personal Care products and services 2% Miscellaneous 4% Credit Card, Consumer Loan Interest
If your budget closely matches the above, here’s what you can do to fix that. Do these in order. Do not proceed to the next step until you’ve addressed the current step:
Stop using your @#!&*! credit cards! Make a down and dirty budget right away! Don’t worry about it being right at first…you can perfect it over time. Just do it! Cut back on your easy to identify, frivolous spending habits (3 dollar lattes, magazines, 450 extra satellite channels, etc.) If you’ve got some expensive habits you’ve wanted to quit for some time, now’s the time. For example, if you’re a hard-drinkin’, chain smokin’, coffee drinkin’ fool, you can reap a windfall of up to 7% or more of your income! Just cutting back to 2 drinks per day, only drinking coffee from home and quitting the cigarettes will net you a nice amount of extra cash and add years to your life! Refine your budget after eliminating what you can. Reduce your 401K and other investment payments (if you have any) to the minimum allowable to keep your 401K and/or other investment accounts open. If your employer has a stock matching plan, keep that in addition to the minimum to keep your investments accounts open (but only up to the minimum you need to get all the matching money.) You’re going to reap a whole lot more return on paying off your debts than you can ever hope to reasonably get from traditional investments. If you’re paying into a college fund for your kids – keep doing that – if you’re not and you really want to, hold off until step 6. Refine your budget to reflect the extra income available, if any. Build an emergency fund equal to 2% of your gross annual income. It should be a little hard to get to (like a separate checking account or mutual fund), but not too difficult (Certificate of Deposit.) Work this into your budget – it’s very important. You will not believe the amount of stress that will melt away when you do this. Pay off your debts – everything except mortgages. And don’t just move your revolving debt into a second or third mortgage – that’s bad. Pay them off using a rapid debt paydown system. Pay off any student loans (for future reference, these are a bad idea.) Pay off your car(s) too. If you’re not upside down on a car loan (your car is worth more than you owe) you can sell it and get a cheaper, paid for car. Throw a small (inexpensive but fun) party for yourself and your loved ones every time you pay off a debt. Take all the money you WERE spending to pay off your non-mortgage debt and start putting it into those investment accounts you put on idle. Make sure you’re investing at least 10% of your gross income. If you followed steps 1-4 exactly, you should have lots of breathing room in your budget now. If this is true and you want to invest more than 10%, go ahead, but be sure to reward yourself too and live a little. Grow your emergency fund to a level you’re comfortable with (2 or more months of income is a good start.) If you have young kids and you want to send them to college, start putting money into a college fund of your choice for them, if you haven’t already. Throw a bigger party than usual when this is done. Pay off your mortgage and throw your biggest party yet! You can start towards this by refinancing to a single fixed rate mortgage (your credit should be in pretty good shape having paid off all your other debts.) If it’s a 30 year mortgage, pay more than your monthly payment to dramatically lower the amount of interest you give to the bank. If it’s a 15 year fixed – wow! That’s excellent! When you’re totally debt free, regularly give away whatever you think you can afford. It’s good for the soul!
Easy? Not. Worth it? Doing the above will pay dividends in your life in many more ways than just dollars and cents. You will assure yourself a dignified and financially secure retirement. Do this well and you will also build a way for your kids and your grandkids to enjoy prosperous lives, and they will remember you with fondness and respect long after you’ve moved on to the other side. Now get started!
Going on a cruise ship excursion? Knowing how to save money on a cruise ship is equally important as having a fun and relaxing time when going on a cruise. Maybe you’re going for your second trip and you remembered like it was yesterday how much money you’ve spent on your last excursion. Obviously you need to turn things around and change your spending habits for the better.
It is a fact that cruise lines are very good at sucking your money while on board. It’s like being on a big, floating Las Vegas casino. The ship’s structure, the colors, the music… almost everything is designed to get you to spend more money. After reading this you’re going to be more prepared and have strategies that can help save you a lot of money after your vacation. Let’s take a look at some tips on how to save money on your cruise ship excursion.
Supply and demand
Timing is everything. If the demand is less then the cost would also be not that expensive. Different areas have different high and low seasons. You can easily spot on price differences as high as 50% when comparing the lower cost to the higher cost.
Cabins
Try to get your cabin as early as possible, then watch the price. If the price goes down, you can then ask for the updated lower cost. You can just keep the original price if the cost goes up. You can save hundreds of dollars on every cruise ship excursion with this technique.
Another thing to remember about cabins — Ocean view cabins costs higher than inside cabins, balcony cabins costs higher than ocean view cabins and suites are the most expensive. Also lower decks are cheaper than upper decks. It would be better to get an ocean view lodge on the lowest area rather than get an inside lodge on the highest area.
Photographs
You should definitely bring your own camera and take your own pictures. If a cruise ship excursion photo is appealing to you, get your whole family/group into the photo because you only pay per photo and not for every person in the group.
Meals
You can eat your meals at the main dining room because they have very good food there which are all FREE. Stay away from restaurants which has optional extra costs.
Water
The price for a small bottle of water inside a cruise liner is $4. The thing is you don’t have to buy water because it is FREE inside the ship. The drinks in the buffet are free and a typical cruise ship excursion allows you to bring in a moderate amount of soft drinks. Let me repeat, you don’t have to buy water because it’s FREE.
Spa and auctions
This is simple… stay away from them!
Internet
Go to the shore if you need to use the Internet because the bandwidth outside the cruise liner is much cheaper and faster.
Laundry
Bring sufficient clothing that will last you the entire trip. Some cruise ship excursion liners do have laundry stations and some do not. Sometimes they will wash your entire laundry for a flat rate.
Discounts
If you need to buy anything, make sure to do it on the last day, because stores will offer special discounts. You can also examine the photographs from the entire trip and just purchase the best ones.
Cash
Pay using cash and try your best not to use a credit card. You’re going to be much more aware of how much you’re spending when you buy with real money rather than buying through your credit card.