Lifestyle
changes
Don’t tell me where
your priorities are. Show me where you spend your money and I’ll tell you what
they are – James W. Frick
Many people
complain that money is hard to come by and even harder to keep around yet some
others are still well off and very comfortable. The secret is financial
discipline and the first step towards having any success in this area is to
design a budget and stick to it. Your budget should be simple and easy to use.
It should be a well detailed plan that spells out expenses and money allocated
to them and must be strictly adhered to. To design a very simple personal
budget, you just need to pick a blank sheet and divide it into three segments.
On top of the three segments you indicate; items, amount and percentage. Under
items you list the basic stuff you will need to buy or allocate money for and
write their corresponding estimated costs under amount. Items can be groceries,
medical expenses, bills and taxes, clothes, entertainment, investment, debts
etc. Using your expected income as a total which equals to 100%, you can
calculate the percentage of the total each item in your list forms. Below is a sample you could follow or modify
and adopt;
|
Items
|
Amount
|
Percentage
(%)
|
|
|
|
|
|
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|
|
Total
|
|
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Until you can
actually tell exactly what part of your income goes into which specific item,
effectively managing your expenses and keeping track of possible excesses and
leakages is almost impossible.
Next time i will talk about specific lifestyle practices.
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