If one of your New Year’s resolutions is to get control of your finances, sitting down and drawing up a financial inventory is a great way to start. Companies like Simple Path Financial recommend that you start by gathering pay information, as well as monthly bills and amounts you pay for things like food and transportation expenses. Knowing what you’ve got coming in is a first step to figuring out what you can afford to spend.
Income Stream
Simple Path Financial recommends starting with a list of all the income that you receive in a month. This could be from full or part-time jobs or any kind of investment that produces income, such as rental properties, stock dividends or bonds. Add these figures up to get your total income for the month.
Outflow
Next, compile a list of your monthly expenses. This will include any payments that you must make on a regular basis, such as rent, utilities, memberships or credit card and loan payments. Now add in an amount for food, transportation and entertainment.
Balancing the Budget
When you have these two figures, the income and expenses, you can see how they balance. If you have extra income, it is a good idea to increase your contribution to a retirement plan or to save for future needs. If your income doesn’t cover your expenses, it’s time to figure out how to eliminate some of the things in the minus column or perhaps take on another job.
Take steps now to get your finances under control.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin