Setting up your personal budget requires a hands-on approach. The following guidelines will help you plan an operating budget for this trip.
1. Gather all your financial details. This will include all your bank accounts, credit cards and insurance papers – everything related to your personal finances. These details will be needed to start your budget.
2. List all sources of income. This includes wages, rental income and dividends and ordinary interests.
3. Sort your expenses from your commitments – list each item under items such as:
- Home: mortgage or rent.
- Association and professional fees.
- Insurance: Sickness, Motor Vehicle, Housing, Content and Life
- Cost of Education
- Child Care and Day Care
- Loans: Car Loan, Student Loan, Bank Charges and Interest
- Income Tax or property tax rate.
- Other payments required as a commitment: motor vehicle registration
- Investment – Yes, commit to your future and pay yourself!
4. List of necessities – again each item under headings:
- Food, groceries, gasoline, home maintenance, security.
- Utilities: gas, water, electricity, garbage disposal, telephone costs  School meals, housewares, car maintenance, Internet services, dry cleaning, monthly parking.
5. Other expenses. Daily personal expenses covering: lunch at work, snacks, coffee, drinks, newspapers, magazines, batteries, postage. Family and personal allowances: parties, entertainment, weekend outings, movies, concerts, other entertainment and events, home improvement, decorating, magazine subscriptions and more, dinners in the restaurant and fast food. Also included: clothing, leisure, personal recreation, books, CDs, manicures, hair care, retouching, shoe repair, personal and family gifts, gardening, film processing, video rental, sports and gymnasium, donations, computer software and other related articles.
6. Once you have listed all your expenses, add the total expenses and deduct them from your income. You will need to convert everything into monthly or weekly. This means that bills paid once a year must be divided by 12 to get the monthly amount. Convert your quarterly payments into annual numbers and convert them to monthly payments. It is important to include paid invoices once a month, to ensure that money is available at the invoice's due date. Place the money in an interest bearing account.
7. Do you need to change your budget? When did you deduct expenses from your income, was there any money left, or did you find out that your expenses exceeded your income? If your situation is the last, you will need to make some adjustments. Commitments can not change. When it comes to basic necessities, you may be able to cut down on food costs and find cheaper utility providers, or try to cut costs by being aware of turning off lights, and so on. But this is the category of other expenses that has the greatest ability to change. they are not necessary and can be reduced or deleted. Regularly review your budget to make sure it's still working for you.
Now is the time to start a personal budget and these guidelines are designed to make sure your budget is really a functional budget – a budget that works for you!