•  Carrie Summers Baikie  •  970-759-2540  •  145 Grand Ave., PO Box 524 Mancos, CO 81328  •  MancosHomes@gmail.com

     

Tip for the New Year: Start with making a Budget

Now is the time to start the New Year off  right with a budget.
A budget is a personal or household itemized summary of expected income and expenses for a defined period of time, usually one month.  While you might think of  a “budget” negatively,  just like a diet, a budget should really mean more efficient spending.  A budget will show you how much money you expect to bring in against all of your expenditures from the required expenses like house payments, electricity, groceries, and entertainment.

How to Make a Budget

  • Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills, and any information regarding a source of income or expense. One of the keys in the budget-making process is to create a monthly average, so the more information you can dig up the better.
  •  Record all of your sources of income. If you are self-employed or have any outside sources of income, be sure to record these as well. If your income is in the form of a regular paycheck, use the net that you bring home after taxes.
  • Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, trash, groceries, gas, utilities, child care, entertainment, student loans, basically everything you spend money on.  Make sure you put in a misc expense.
  •  Total your monthly income and monthly expenses. If your end result shows more income than expenses, you are off to a good start.  However, if you are showing a higher expense column than income, some changes will need to be made.  If you are in a situation where expenses are higher than income, you should look at your expenses to find areas to cut. Can you shop more efficiently for groceries? Are you throwing away food that is never eaten?  Are you eating out alot?  Are you buying coffee at the coffee house each day? Can any of these expenses be minimized?
  • Review your budget monthly.  Do any of the expenses or income need to be adjusted?  Can I pay off my debt a little faster?  For example, just paying a few extra dollars on your mortgage payment and specifying it goes directly to principal can save you tons!
  • Seek help.  I’d be happy to sit down with you and help you for free.  I’m here to hopefully make your life a little easier.