LetsLearnFinance

Manage Your Money



Hello every one, here goes my best wishes for the New Year. We all hope the year fulfills all the dreams and wishes.We all love to make resolutions every year and this year too shall be no exception.
Well, coming to the statement of trying to achieve the dreams we should plan our aims needs and requirements according to our budget. This is simple to listen but really needs care.
Let’s revisit the basics again. We all thrive to establish ourselves in a good financial position and “Every penny saved is every penny earned” as goes a famous saying should be well remembered. We all have a limited source of income and this includes accrued income from all viable sources. Next prudent approach requires jotting down expenses:--
Under two heads—Planned (regular) expenses and Unplanned(irregular) expenses. However before approaching this method we all should keep aside 25% of entire earnings initially into any mode of secured savings then to approach Expense budgeting as mentioned earlier.
Coming back with planned expenses, it should entire house hold expenditure (Taxes, Rent, Bills, Fooding and Lodging, Emi, Premiums).Apart from this money should be kept for other possible expenditures like entertainments,Eating out).
This entire process should take into around 80% while remaining 20% should be dedicated towards irregular or forced expenses. It includes accidental requirements, sudden needs and lot more which are unforeseen requirements. Let us see a hypothetical illustration for better understanding.

Mr. Y earns 10000/- US dollar every month and has no other source of income apart from the salary he draws every month and he follows this method of money management every month to meet his needs.

Steps................................................ Amount

i) Money kept aside................................ $ 2500 [25 % of earnings]
ii) Money Left...........................................$ 7500 [75 % of earning]
iii) Regular/ planned expenses.............. $ 6000 [80 % of money left]
iv) Irregular/ Unplanned expenses.......$ 1500 [20 % of the remaining amount]

However this is solely personal approach towards managing money, I am waiting for further views and inputs from my fellow bloggers.
Cheers enjoy the new year bash to the fullest and my heartiest wishes to all once again.



Thanks
Pamela