Paul Horwitz a financial expert is of the opinion that it is not important how much you earn on a monthly basis. What is important is how much you save. It’s just middle of the month and you are wondering where all has your earnings gone. You are not alone as many American homemakers suffer from similar syndrome like you and fail to understand how they have spent their expenses. It is thus essential that you bring in some organizations into your home management and introduce the monthly budget worksheet.
What would it do?
The monthly budget worksheet would help you to understand a few things which are-
• You take a realistic estimate of your financial condition and then plan out your monthly expense.
• You learn to prioritize your monthly expenses and trim the expenses which are creating a hole in the budget.
• Monitor your expenses well on a daily basis.
• Prepared for exigencies if you have them.
What are the essential steps to plan your monthly budget in a worksheet?
What are the objectives you want to achieve in the month?
Before you start creating a Monthly Budget Worksheet, you need to understand what the objectives you want to achieve are. Here you have to be truthful to yourself and ask yourself a few questions like-
• Do you have any urgent debt which needs to be paid off immediate?
• Have you paid off your educational loan?
• Are you creating a saving which would help you to take your family for a vacation or put into some investments?
Each objective you set up has to be SMART in nature. Also the goals can be short termed, mid termed and long termed. A family vacation is a long termed goal while saving for anniversary is a short termed goal.
What is the source of your income?
When you are planning your budget in a worksheet you have to understand the sources of income and list them. The incomes could be work salary, investment interest and also scholarship money.
How are you spending the money?
The largest expense for any Americans is housing which could be in form of repayment monthly installments on mortgage loans or just home rents. The second most expenditure is transportation. Average Americans own two cars and 17% of the budget goes into fuel and car maintenance expenses. In order to understand your monthly needs, you need to group the needs into 3 groups like fixed needs e.g. rent and phone bills, variable needs like good and fuel and want which are eating out on weekends, buying an appliance etc.
Make an estimate of your expenses
Now that you have estimated your expenses, add all your expenses and see how they stand. You would be surprised that you are spending more than you earn.
Take control and cut out the unnecessary expenses
In the end you would need to cut out the extra want from your monthly budget worksheet and make the budget work for you. Monitoring has to be strict and then only can you save for your dream family vacation next year.