The Family Budget is something to be given serious time. Prepare a Projection for every quarter. Check it every month for deviations and reasons; Try to remain within budget as far as possible...slowly a descipline will get inmotion.
You may need a handy proforma to work out all that and more..
Start managing your expenses...the budgeting helps.
All the best.
Start Early, Proceed Systematically, Look Long Term
Let Your Money Work For You
All You Wanted to know about money
Monday, March 1, 2010
Sunday, February 28, 2010
Does Your Money Work for U?
You can run a simple test and know whether your money works for you or Not.
This will help you to plan and make sure you get out of rat race for remaining part of your journey on the earth. None of take anything from here as we leave our body at the end of this journey. But we need to hold our body like an oiled machine to make it run its full life. This is the time for one to create wealth not just for himself but also for the rest around him. and so let's plan to get rich!!
Sit down and write on a piece of paper or use Excel work sheet in you PC to write down your Income, Expenses, Assets and Liabilities as of today.
Any difficulty in identifying Income?
It is that cash flow which flows from an Asset. Once you sell off the asset, the income flow ceases. eg: Rental Income ceases whern you dispose off the building/house; Your salary ceases when you lose the job due to illness/lay off/closed business.
Any difficulty in recognizing expenses?
Any amount that is spent and not creating an income flow thereafter. Eg: You pay for gas/telephone/internet/Cable TV/Newspapers & periodicals/electricity/water/transportation to work place/food/clothing....
Now to identify an Asset ??
Some expenses are huge, and saves an expense stream of cash flows.Like a House Construction.Two years you took to make that beautiful house at a cost of Rs 10 lakhs. It saved you several thousand rupees in rent going out every month...It is an asset. Your house that is used for residence is Priamry Residence. And remember to make a difference between personal asset and a general one. Your armani suit is a personal asset. Your Rolland Watch is a personal asset. All those assets that you use as part of your personality are normally treated as personal assets.
and last, but not the least... Your Liability?
An outstanding payment of rent/waterbill/electricity bill? Your son's college fees due next year? ....frequency varies..it is certain that you have to meet it. You are committed to meet it. It is potential..not yet materialised or real...
Now feed all that into this format.
Do you have Salary Income Less Than Other Incomes?
If No, you are in the herd...You need to break-out. re-work your earning capacities so that soon you reach a level where your assets will work for you. Here you may need expert help in Personal Finnacial Planning .
If you are a business person, look how much of your time is spent in managing your business and then allocate a certain income for that effect. Then re-work again.
All the best.
This will help you to plan and make sure you get out of rat race for remaining part of your journey on the earth. None of take anything from here as we leave our body at the end of this journey. But we need to hold our body like an oiled machine to make it run its full life. This is the time for one to create wealth not just for himself but also for the rest around him. and so let's plan to get rich!!
Sit down and write on a piece of paper or use Excel work sheet in you PC to write down your Income, Expenses, Assets and Liabilities as of today.
Any difficulty in identifying Income?
It is that cash flow which flows from an Asset. Once you sell off the asset, the income flow ceases. eg: Rental Income ceases whern you dispose off the building/house; Your salary ceases when you lose the job due to illness/lay off/closed business.
Any difficulty in recognizing expenses?
Any amount that is spent and not creating an income flow thereafter. Eg: You pay for gas/telephone/internet/Cable TV/Newspapers & periodicals/electricity/water/transportation to work place/food/clothing....
Now to identify an Asset ??
Some expenses are huge, and saves an expense stream of cash flows.Like a House Construction.Two years you took to make that beautiful house at a cost of Rs 10 lakhs. It saved you several thousand rupees in rent going out every month...It is an asset. Your house that is used for residence is Priamry Residence. And remember to make a difference between personal asset and a general one. Your armani suit is a personal asset. Your Rolland Watch is a personal asset. All those assets that you use as part of your personality are normally treated as personal assets.
and last, but not the least... Your Liability?
An outstanding payment of rent/waterbill/electricity bill? Your son's college fees due next year? ....frequency varies..it is certain that you have to meet it. You are committed to meet it. It is potential..not yet materialised or real...
Now feed all that into this format.
Do you have Salary Income Less Than Other Incomes?
If No, you are in the herd...You need to break-out. re-work your earning capacities so that soon you reach a level where your assets will work for you. Here you may need expert help in Personal Finnacial Planning .
If you are a business person, look how much of your time is spent in managing your business and then allocate a certain income for that effect. Then re-work again.
All the best.
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