We start with the income. Ideally, it will be the larger of the two
figures (income and outgo). List any
money that historically has come into the household and can be expected to come
into the household again. Things like
ü Salary or Wages from your regular
employment
ü Tips
ü Dividends from stocks or interest payments from bonds
ü Interest on savings
ü Proceeds from mutual funds
ü Money from a part-time job
ü Royalties (you do own an oil well, don’t you?)
ü Commissions
ü Rents received.
ü Tips
ü Dividends from stocks or interest payments from bonds
ü Interest on savings
ü Proceeds from mutual funds
ü Money from a part-time job
ü Royalties (you do own an oil well, don’t you?)
ü Commissions
ü Rents received.
List any money you can reasonably
expect to bring into the household on a routine basis. It might not be a good idea to list lottery
winnings in your budget. You cannot
reasonably expect to win the billion-dollar Powerball payout.
You probably should not list the
repayment of the loan you made to your brother-in-law Bud since chances are
good you will never see it again.
Add all your gross income
together. That is what you base your
tithe and savings on.
Add all your net income items
together. This is what you have
available to you to cover the monthly expenses.
Out Go
Fixed Expenses
Fixed expenses are things like
Tithing 10% of Gross Income- Savings 10% of Gross Income
- Mortgage or Rent
- Homeowner’s or tenant’s insurance
- Homeowner’s/Tenant’s association fees
- Vehicle payment (purchase or lease)
- Vehicle insurance
- Vehicle Registration, taxes, parking,
etc.
- Tuition
- Life and health insurance
- Loan Payments
- Furniture payments
- Student loan payments
Variable Expenses
- Electric
- Water /Garbage
- Gas/Fuel Oil/Propane/Butane
- Fuel for vehicle
- Groceries
- Dining out
- Entertainment: Movie Tickets,
Memberships (club, gym)
- Telephone (home and mobile)
- Internet access
- Cable/Satellite television (include
programing on demand such as Netflix, Blockbuster, Amazon, Hulu, etc.)
- Credit card and other revolving credit
payments
- Lessons: Music, Golf, Martial Arts,
Dance, Art, Tennis
- Kids Activities: Scouts, Sports, Club,
Camp, Tutor
- Day Care/After School care
When you are calculating your outgo, be sure to include
things you do not have to pay every week or month. This type of expense includes property tax and
car registration. You may also have membership fees for clubs or organizations
that are paid on a yearly basis. What
about back-to-school expenses for the kids?
Make sure you budget for those things as well.
When calculating your budget, you should set aside a little
each pay period to put toward those items that you know will come up but are
not paid out of each paycheck.
Add all of your outgo items up. This gives you the starting point for your
expenses in your monthly budget.
Now, subtract your outgo from your income. Ideally this will be a positive number. If not, you need to find a way to increase
your income or decrease your outgo. The
next few posts will address doing just that.
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Please be advised that all the information in this course is provided to educate, enlighten, and broaden your views in life. The information provided is not a substitute for medical, legal, dietary, financial/accounting, or religious professionals.
Always consult a professional before you act on any of the information you find in this course.
Disclaimer
The opinions or advice listed in this blog or website should be used as a place to start only. It is not a substitute for the use of a professional.
Please be sure to consult your attorney, accountant, and/or other professionals with any specific questions.
There is no one right answer to any business question that will cover all circumstances.
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