Saturday, May 06, 2006

Personal financial budgeting

How to budget your money effectively? It is very important to do budgeting especially for personal budgeting. This will give you more control over your cash. Actually, it is not so hard to do a budget planning. So, today I will explain on how to budget your cash in a few simple and understandable steps.

What you need:

A pen
A piece of paper
A calculator
Knowledge of your income and expense

Budgeting process

1. List all your income- This may come from different source like salary, interest, etc.

2. List your fixed expense- For example rent, car loan, internet bill, electricity and water, income tax, etc.

3. List all variable expenses- The main expense comes first. Don’t know your main expenses? This article will explain further.

4. Include your savings- Saving money is really important for the future. So, do list this too. I would recommend you to save about 10 to 15 percent of your income.

5. Some money for emergency expense- This will include unplanned shopping, medical expenses, etc.

6. Minus your expense from income- Make sure the value is positive or at least 0. If the value is negative, tweak your expenses.

7. Put your financial budgeting plan at the place where you can see it easily.

8. Make sure you stick with the budget. Don’t over expense!

The whole process will only take about 5 to 10 minutes. Therefore, I hope you can utilize this simple ‘budget planning’ to help you to have a total control over your cash. Good luck!

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