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Budgeting
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Budgeting is very difficult subject. In my particular case, the few times I have persuaded my wife to sit down with me so we can review our budget, I begin by saying we need to cut back. She, in turn, looks at me with the utmost innocence and replies, “No, you just need to make more money.” That certainly ends our budgeting discussion, because what would follow next is an argument!
Money is a tool that enables you to reach your goals in life, but until you know where your money goes, you can’t make conscious decisions about how to use this tool effectively. A budget illustrates exactly where your money goes and provides a spending plan that lets you save for the things that are important to you: a new house, a new car, a comfortable retirement, a college education, travel, or whatever your particular goals and dreams may happen to be.
The best way to get started is to put together a very basic list of your monthly income and expenses. You can download a sample budget worksheet by clicking here. It consists of two main sections: Cash Inflows, or Sources of Cash, and Cash Outflows, or Uses of Cash. Each section is divided into different categories. Have fun completing this form. The upside is that you will have a better feel for where your money is coming from and where it is being spent.
You can also visit a site like www.mint.com and learn how to use their budgeting system. This software is not just for keeping track of your bank accounts. It is much more than that. Mint.com can generate reports to track your net worth, track your spending, and see how you’re trending with respect to debt. You can even budget yourself for the months ahead. This technology is all free thanks to the creators and some sneaky advertising.
The following instructions will show you how to set up an account on Mint.com and utilize the tools and features it has to offer.
- Create an account on Mint.com
- Upload one or more of your bank accounts or investment accounts to mint.com, as well as any assets you have such as a automobile or home.
- Go to the transactions tab and assign any uncategorized transactions to a category.
- Create a budget using the planning tab. You should have a minimum of 10 categories you are budgeting for.
- You are done!
For more information on budgeting, call Professor Ulivi at 714-771-6000 or email him at professor@ulivi.com
