Budget

Creating A Budget From Irregular Income

If you have irregular income and/or you are self-employed, you may think that creating a budget is difficult. The reality is, creating a budget based on irregular income can be relatively simple. 1. Due to the irregular nature of your income, you need a relatively substantial “emergency fund”. As the amount of income you receive each month fluctuates, you will need a source of funds for the “lean times”, and a place to stash excess funds during the “harvest times”. This emergency fund can be in your checking account, your savings account, or a money market account. You need to have easy access to the money in this fund. 2. Create a list of your monthly bills, listed from most…

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Budget, Goals

Creating a Personal Finance Goal

I love to create goals for myself. I’ve created goals for my websites (number of subscribers, revenue, etc), my health (weight loss, miles walked, etc.), and my finances (debt repayment, emergency fund savings, etc.) Currently, I have a goal of saving $4000 before April 1, 2007 for my children’s Educational Savings Accounts. (The actual long-term goal is to save enough money for my children to attend a public university in Georgia. The short-term goal is the amount, in this case, $4000.) To achieve my goals (both the long-term and short-term goals), I need to create some plans. Again, I need a short-term plan, for the short-term goal, and a long-term plan for the long-term goal. (In reality, the long-term plan…

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Budget

Budgeting By Percentages Does Not Work

The one thing that stands out to me when I read personal finance books is how they “generalize” about budget category percentages. Most authors will advise that you spend “x percent on housing, y percent on food, and z percent on clothing.” The plain truth is, simply using generic percentages does not work. To build a quality, accurate, usable budget, you need to work with the real facts of your own situation. Simply note your own, unique situation, and tailor a budget that is specific to your finances. For instance, my daughter is involved in gymnastics. In order to pay for her gymnastics classes, we had to create a “gymnastics” budget category. And, WE had to decide what percentage of…

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