Page 22 - Book2E

If you think nobody cares if you’re alive, try missing a couple of car payments.
—Earl Wilson
14
To create an accurate monthly budget, all of these expenses must be accounted for. It may take you several months to get each of these numbers right. As each month goes by, add each expense to your list until you have included everything. It may take a whole year, but the more accurate your records are, the more control you will have over your finances. Eventually you will have a record of every dollar you receive and spend.
Evaluate Your Budget
Regular evaluation of your budget will help you determine if it is working. Once you’ve established what your income and expenses are, you want to get them as close as you can. Most of the time, they won’t match exactly because not everything can be predicted exactly. The point of having a budget is that your income and outflow don’t dif- fer too much. Review your budget every month. Monitoring what happens each month will put you in a better position to make necessary adjustments to keep your plan on target. Sit down with all the members of your household to evaluate your progress and make any modifications you feel are neces- sary. Update and revise your plan on a regular basis as your goals are
reached and new ones are set.
The purpose of your plan should be to find the best way to improve your family’s finances. Your plan will become more defined the more specific you make your purpose. Once you have control of your current spending, you’ll want to turn your budget into a plan for the future. Would you like to spend less on some things? Are you saving as much as you should be? Are you investing enough to reach your retirement goals? Armed with this information, you can realize your short- and long-term financial goals and attain economic prosperity. It is a proven strategy.
Establishing a Budget