by Bob Reeves
If you only have time to do one thing relating to your finances then do a budget plan. A budget plan is a way of recording all of your expenses and all of your income over a fixed period of time, usually a month. You can create a budget plan on paper or set it up on a spreadsheet if you are that way inclined.
Budget plans are made up of two sets of information – income and outgoings. The first stage is to itemise all of your sources of income per month. Typically this will be from your main job but may also include other income such as interest paid on savings, family allowance or other benefits. For most of us this will probably only be a fairly small list. Then add all of this up.
Now comes the harder part. You need to list all items of expenditure. This is all of the money going out of the house each month. You can get this information from recent bills or from your bank statements. This will be a long list and will include your mortgage or rent, utility bills, council tax, petrol and food. Make sure that you account for absolutely everything as many people underestimate how much they spend each month. Add all of this up and then add 10% as a contingency.
Now take the total outgoings figure from the total income figure and you will see how much you have got left or how much you overspend each month.
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