Articles Budgeting, Economics and Finance A Novice's Guide To Budgeting - Part Two
| A Novice's Guide To Budgeting - Part Two |
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| Friday, 22 February 2008 08:01 | |
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Last week we covered parts 1, 2, and 3: Find Out How Much You Earn, How Much You Are Worth and How Much You Owe. This Guide follows on from last weeks post.
Step Four: Find out what you've promised Now write a list of any contractual obligations you've entered. This includes a Foxtel two year contract, any mobile phone contract, a loyalty contract (for example, we are in a contract with our electricity supplier that we will stay with them for two years and they will give us cheaper electricity), gym memberships and any other sort of money you are bound to pay over a period of time. Also include in here the payments you make on each of the loans and borrowings you collected in step three. Don't include loans you are not making payments on. Write down the date (as best you can) of when this contract expires and how much you have owing. If you can, find out if there is a “pay out figure” on these also – either a payment for breaking the contract, or a discount for paying the contract off early. Write down the cost and how often you have to pay it. It can also be very useful to find out when payments are due. Are they due every August, or March, June, Sept, and Dec, or are they due the 15th of the month, or every second Tuesday? The longer this list is, the less you will be able to change when you try to adjust your budget. Step Five: Find out what other expenses you have to pay At this step, write down any other expenses that you cannot get out of, that are a fixed expense. They include land rates, sewerage costs, garbage disposal, strata levies, pay-by-the-month insurance policies, home rental, mortgage, child care, landline line rental, car registration, prepaid mobile phones and anything else you can think of. Write down the cost and how often you have to pay it. Find out when the next payment is due. Step Six: Find out what else you need to buy regularly, that is not a fixed expense Write a list of things that you feel you need, that are not a fixed expense. This may include groceries, medical expenses, travel expenses for work, study costs, telephone calls, petrol, electricity, water, gas - the list is going to depend on your circumstances. Now estimate how much you pay and how often. Also write down when this is next due. Next week we'll be setting up our spreadsheet for the budget. |
