Three Steps To Budgeting
Summer time is the best time to get your finanical house in order. After all, we’re past the tax season scramble and can focus on our financial goals before we get hit with holiday spending.
It’s never to late to get started on your financial goals. Perhaps you want to make this year the year you become debt free or you’re saving for a major purchase like a home or planning a wedding. While many online entrepreneurs understand the importance of getting professional help when managing their business bookkeeping, only a few think to ask for professional help in managing their personal finances.
In the business world, a budget is a key document that provides guidelines on capital expenditure to prevent overspending and ensures the availabilty of funds should the company run into unexpected trouble and require funds. These same principles can, and should, be applied to our personal lives.
There are countless companies that rely on budgeting and financial reporting to manage their day-to-day operations. Budget-savvy CEOs typically do not make a move without consulting their financial plan. Most people understand that business success relies on creating a budget and sticking to it. The companies like Coca-Cola and Dell rely heavily on budgeting and forecasting. I’m here to tell you that personal success does too.
Everyone talks about setting up a budget and sticking to it, but how do you really go about figuring out what your budget is, or should be? Let’s face it, doing a household budget can be pretty dull. But if you’re ready to roll up your sleeves and crunch some numbers, here are three steps to get you on your way.
1. Assess your financial resources
Calculate how much money you have coming in each month from all sources.
2. Determine your expenses
Determine how you spend your money by reviewing your recent spending. Separate fixed expenses (mortgage, rent, car payments, insurance) from variable expenses (food, clothing, entertainment, charitable gifts).
3. Set goals
Establish a list of the finanical goals you wish to achieve.
Once you’ve figured out how much money is coming in and where it’s going, you can put together a plan that matches your goals with your financial situation. The trick towards saving for a major purchase or paying down debt is to pay yourself first. Simply set aside a certain amount of money each month to go into an account that you will not touch or to be applied to your debt.
If the task of creating a budget seems daunting to you, then consider the services of a professional Virtual Bookkeeper. Working with a bookkeeper reduces the stress of managing your personal finances by allowing them to manage things for you. A good bookkeeper can create a highly personalized budget based on your financial goals and income. You can put your mind at ease knowing that a professional plan will be created and managed for you, allowing you to focus on the things that are important to you. They pay your bills weekly and provide you with a snapshot of your financial picture weekly. They do everything – you enjoy the rewards.