Money Management 101

 Money Management 101

What is your annual income?

Begin with your take-home income. It is very easy to estimate your take-home pay if you get the same paycheck each month. It is easy to estimate your income if you work inconsistent hours, get tips, or are self employed. This will be adjusted for any future changes. Add up all other reliable income sources such as support payment. Add all your income.

Take a look at all of your expenses.

Check registers, monthly credit card or loan statements, cable bills, phone bills, receipts from major purchases, and other documentation can be used to create your list. You can keep track of cash spending, including small daily purchases, by saving receipts from cash registers. List grocery, food, prescriptions, school supplies, and eating out costs. In addition, list any periodic payments like insurance premiums. Calculations will be more accurate if you have more months of spending. Add all expenses.

You can do it on a sheet paper. You can see the income on the left, and the expenses on the right. Microsoft Excel provides a popular budgeting worksheet.

Determine which expenses must be paid and which can be deferred.

You can categorize your spending. You can group expenses like housing, transportation and food. It is important to understand which spending categories (e.g. Rent and discretionary expenses (e.g. You can save money by eating out, so you are aware of where to cut back. These things might help you save money.

Do not confuse luxuries and necessities. Eating is a need. Four-star restaurants are a luxury. You can brown-bag it for a few days per week.

Reduce your cable TV bills if you have a high bill.

A big cellphone bill? You can find a plan that's cheaper or less expensive.

Be careful with the small things. It might surprise you how many $4 lattes you get at a coffee shop cost. Make your own coffee or drink water.

Use coupons, either paper or electronic, to create "shopping clubs" with family and friends so that you can share large-box quantities.

Ask your employer whether they offer commuting help.

Borrow instead. From libraries, friends. Things you use only once or very rarely like books, DVDs, and fancy clothing.

Use cash. While credit and debit cards offer great conveniences, they are easy for people to abuse. If you write checks or spend cash, you can easily see how you're spending your money.

If your attempts to reduce expenses fail to produce a deficit, you should look at income. Are you able to work overtime or find a job at night? This might be possible, even if temporarily. How to Keep Your Money in Vegas