HOW TO CON­STRUCT A BUD­GET

Little Treasures - - FINANCIAL PLANNING -

“Rather than think­ing of bud­get­ing as de­pri­va­tion, think about the fact that you’re now telling your money where to go, in­stead of won­der­ing where it’s gone,” says Katie. Fol­low th­ese five steps:

1 Break down your cur­rent in­come by source and fre­quency.

2 In­ves­ti­gate where you spend money. Print out your bank state­ments from the last 12 months (or at least three months).

3 Un­der­stand your ex­penses. Cat­e­gorise them into fixed costs (such as in­sur­ance and rates) and vari­able costs (ie petrol). Re­mem­ber to in­clude oc­ca­sional ex­penses, such as gifts and med­i­cal bills too.

4 Set bud­get.the I ask my clients to de­ter­mine how much they would like to spend on an an­nual ba­sis and we break this down to quar­terly check-ins with weekly tar­gets.

5 Track your spend­ing. To stick to a bud­get, you need to stay con­nected with your out­go­ings. If you start run­ning over in ar­eas, you’ll have to make dif­fer­ent choices go­ing for­ward.

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