Friday, February 20, 2009

Get to Know Your Monthly Expenses the Quick and Easy Way

You have no time to gather information about your household expenses and yet you want to know your monthly spending. There is an easy and quick way to find out: You only need to do it once a month instead of keeping track of your expenditure every day.


This is the formula:

A) Determine your total cash at the beginning of the month:

Cash
Savings accounts (for making payments and receiving deposits)
Current accounts (for making payments and receiving deposits)

Add

B) Cash income for the month:

Salary
Dividends and Interest receipts
Other income (e.g. earnings from AdSense)

Less

C) Fund at the end of the month:

Cash in hand
Savings accounts (for making payments and receiving deposits)
Current accounts (for making payments and receiving deposits)

Equal

D) Your expenses for the month

In short: A+B-C=D

This method is only good when you actually pay in full the expenses that you have incurred for the month. Bear in mind also that the outflow of cash includes your payment made towards credit cards and other non-expense items such as savings and investment. It does not include charges for the month made on credit cards which you have not yet settled and any other outstanding bills. There is a difference between expenses incurred for the month and actual cash outflow for the month

I would suggest you do a detail record of your expenses for a few months so that you know the pattern of your monthly spending in the following areas:

Grocery items
Utility bills
Children's education
Petrol and traveling
Housing loan
Insurance premiums
Car loan
Entertainment
Clothing
Medical expenses

When you have done that you can review and do a cutback on unnecessary expenses in this trying time.

Happy budgeting and prudent spending!

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...