Create a budget It is an essential starting point to optimize the economic management of your home. Planning income and expenses helps us maintain good financial health.
Create a budget It means anticipating the facts. Therefore, it is logical that there will be modifications to what was planned later. However, this reference allows us to establish some guidelines along which the economic management. Don't you think it's much easier to identify deviations than to analyze expenses and income month by month from scratch?
1. Who needs a budget?
Basically, Budgets are effective instruments, which They allow us to know what are the expenses and income expected for a specific period. With them you can establish a reference map for your economic itinerary. By creating that still photo in advance, it's much easier to establish:
How much you can dedicate to saving.
How much does it cost to meet your needs and achieve your goals?
Know what you are spending your money on.
Identify leaks of dispensable expenses.
Establish measures to cut costs.
If you have agreed to a budget and consider it a reasonable situation, each month you will know exactly how it is going.
Have you spent more? You will have to counteract it in the following periods.
Have you reduced monthly costs? You can save or treat yourself to a whim or additional outlay.
Therefore, effective budgets They are always recommended for all families, companies and individuals without distinction. In fact, the economic management It will improve in the medium term thanks to its preparation and monitoring.
2. How to create a warranty budget?
If you are going to budget your economy for the first time, you need to be clear about the steps you must follow, and at WorkCapital we want to help you do it. For this reason, we have created a quick reference guide to creating effective budgets.
1. Make a list of income
The initial chapter is to establish what sources of income the business or family unit in question has. How they exist different types of income, it is essential to identify and quantify them with reality criteria. Park the possibilities and focus on certainties so that your assessment is realistic. Which of these will you receive?:
Professional income. Payroll, overtime payments, compensation, tips, etc.
Pensions. Disability, retirement, unemployment benefits, alimony pensions...
Financial income. Dividends, rental income collected, financial interest...
Others. Subsidies, mainly.
2. Identify expenses
Know all the planned money outflows It is the second cornerstone of any economic management. It includes everything from housing payments to daily purchases, including supplies, travel and ant expenses.
Be exhaustive and apply a principle of prudence: It is better to sin by excess than by defect. That is, between the possible and the certain, it includes the probable. It is always better to obtain periodic positive margins after adjusting to a less optimistic scenario. When you don't have all the information, establish realistic estimates of their quantities.
The desirable situation is that expenses do not exceed 90% of income, so you will have the ability to save. If these are less than the payments, the debt could become chronic and dangerous.
3. Reduce expenses
Do not forget that create a budget It is more than capturing a fixed situation. It is a tool to improve the economic management, so this phase is essential. Eliminate all unnecessary, dispensable or reducible expenses.
So be clear about the differences between these expenses:
Mandatory fixed. You can't stop paying them and they are quite constant. Their non-payments generate late payment interest and other negative consequences.
Necessary variables. They are inevitable in everyday life, but you have room to reduce them.
Discretionary. They are all the others, susceptible to being eliminated or minimized.
4. Raise awareness among participants
Family members and professionals must receive clear information about the effective budgets defined. In this way, they will be able to provide valuable data and be part of the solution to balance expenses and income.
5. Implement and follow
It's time take action, commit to what is established and verify month after month that what is proposed is achievable, realistic and productive. Otherwise, you will have to make variations.
Ultimately, create a budget It is the first step to having improved professional or family finances. Do you dare to try it?
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