Hey what’s up guys!
Welcome to another episode of Pan The Organizer.
I’m Pan, and you and I are going to work together to help organize different aspects
of your lives.
In today’s show, we’re to show you how to make a monthly budget.
So what is a budget?
Well basically, it’s a document that helps you track income and expenses.
So why make a budget?
Well, basically, it's to help you reach your financial goals.
You might want to go on a trip.
You might want to buy a new car.
You might want to buy a new house.
You might want to buy that latest gadget that you've been dreaming about.
Basically, anything, any dream that you want to accomplish, well you got a tool to help
you do that, and that's a budget!
There are many advantages to having a monthly budget, and I find that one of the best ones
is that it helps you reduce your stress because it will help you keep track of your expenses
and it also helps you to avoid overspending.
So the key principle behind a budget is that you have income coming in and you have expenses
going out.
So there are 4 basic steps to creating a monthly budget, and I'll tell you the tips and tricks
on how to make it super simple.
So, step 1: You have to make sure that you know your monthly income after taxes.
Usually that's your salary, or the take home amount that you'll see in your bank account.
Step 2: So, from your monthly income, you have to subtract your fixed expenses.
Those are expenses that are recurring every month, such as car payments, mortgage, loans
and insurance.
Step 3: You also have to subtract your variable expenses.
Those are expenses that you actually have control over.
Things such as utilities, food, gas, clothes, and medical bills.
Step 4: So that's the final step.
You basically subtract your fixed and variable expenses from your total income and you should
be left with savings.
You can make your budget the old fashioned way, by hand with a handy calculator, or you
can use a spreadsheet on your computer.
Regardless of the method you choose, the most important thing is to never forget to keep
track of your budget!
Keep revisiting it.
You guys have to make it as some sort of a game.
It has to be fun.
The earlier you learn to put money aside, the easier it will be for you to increase
your savings and just enjoy life!
Let's go ahead and give you an example of a budget for an average person who makes say
35 000$ a year.
So that take home amount monthly would be roughly 2000$ in salary after taxes.
So here's an example of that person's budget might look like.
So you'll have Housing costs.
That's mortgage, taxes, rent, insurance, and electricity, which would tally 650$.
You'd have your Utilities (phone, cell phone, cable,
internet) 100$.
Food 350$.
Transportation (which is car, bus, fuel, insurance, maintenance, and parking) 400$.
Your medical bills (which include health care premiums, over-the-counter, and specialists)
50$.
Debt payments 100$.
Clothing, personal & discretionary expenses, roughly 150$.
And your Savings should tally up to 200$.
Remember, based on your income, your allocations may be different.
You can shift amounts around to better suit your situation.
So you saw how easy that was!
You basically sit down, come up with your income, subtract your expenses, and figure
out just how much saving you can have and set a goal for the future months so you can
get even more savings!
Those little amounts every month really really show up at the end of a year.
So 200$ a month when you think about it, that's 2400$ of savings per year!
Now keep in mind that you have total control over your budget.
If you need more savings, instead of taking the car to work, maybe you can take public
transportation and save on that.
Instead of going out to eat, you guys can maybe prepare a lunch for work.
You can cut down on your utility bills.
Do you really need that big cell phone plan?
Now your cable provider gives you a lot of channels.
Do you really need all those channels?
You can modify that too.
If you don't work enough hours, maybe you can think of doing a bit of overtime to increase
your income.
Maybe have a second job if one job doesn't give you enough hours to have the salary that
you guys want.
And basically you can reduce spending on the stuff that you buy on an every day basis.
The fact that you'll be keeping track of your expenses in your budget will probably make
you realize that there are some things that you don't need.
Basically, you can shift those amounts around to suit your lifestyle and to actually cater
to your needs.
So that's it!
You guys saw, it's not that complicated to make a budget!
Now some financial advisors on TV might use some big terms and you know what?
It's not necessary!
Because it's actually quite simple and every single one of you guys can go ahead and do
a budget.
Now in the comments down below, you guys tell me what are you going to do with all that
money?
You're going to have stacks and piles saved up after you follow these simple tricks!
Hey, if you guys enjoyed this show, don't forget to go crazy on that LIKE button.
Don't forget to SUBSCRIBE to my channel!
And follow me on social media.
In the meantime, keep it tight, keep it clean, and I'll see you on the next one!!!