What's in Your Budget?

Sure, we've all seen or heard the "What's in your wallet?" commercials.  Still, an equally important question remains: What's in your budget?


Not many people could answer this question.  Why?  Because many people do not have budget in place.  There are several reasons why one may not have a budget.  Perhaps they are not sure how to create one, just don't know where to start or unsure of what to do with a budget (or how to use it).

This guide will help in understanding and getting started on creating and learning how to maintain a budget or expense plan.

What is a budget?

A budget (a.k.a. expense plan) is a plan used to decide the amount of money that can be spent and how it should be allocated.  It's purpose is to account for all available funds as well as itemize expenses.  A budget is a great informational tool that can be used in many situations and assist with everyday accounting.  It can (and should) be updated as changes come along, as they often do.

Who should have a budget?

Everyone should have a budget; no matter the income/tax bracket or indebtedness.  Each individual with income and/or spending as well as a separate combined household expense plan.

Why should I have budget?

It is important to create and keep a budget because knowing exactly how much money is coming in and flowing out will help you to:

*become and (hopefully) remain more organized.

*notice where changes can or should be made.

*keep up to date with bills and stay creditworthy.

*detect mistakes, identity theft, or potential fraud.

*save money!


When should I make a budget?

Make a budget now and review it often.

As life happens and changes occur, update and adjust your budget.  This may be as:

Income Changes
 -pay rate increase (promotion, career move, merit raise, additional employment, etc...)
 -pay decrease (demotion, job loss, layoff, cutbacks, retirement, etc...)

Additional Debt is Incurred
 -new purchases (car, home, laptop, groceries, gas, etc...)
 -emergencies (medical or otherwise)

Decrease in Debt/Obligation
 -lowered balance by a little or by a lot (monthly payment, principle payments, overpayments, etc...)
 -satisfied obligation (paid off balance, settled for less than full balance, etc...)


What do I need to include in my budget?

Everything. 
Seriously.  All incoming and outgoing funds need to be included.

Income
Every bit of income received from all sources should be listed.

This may include: employment (paystubs, W-2, 1099), unemployment (paystubs,1099), retirement (statements,1099-R), pension (statements, 1099), disability (award letter,statements), worker's compensation (award letter,1099), dividends paid, rental income, earned interest (1099-INT, statements), business income (balance sheets, receipts), rebates/refunds/rewards (1099), and several other sources.

Include the source, gross amount (before deductions), net amount (after deductions), and frequency.

Debt
All debt listed on credit reports should be listed.

This may or may not be painful, but all open accounts (including zero balances with available credit) need to be included along with the minimum payment amount, balance, and credit limit.  

It may also be useful to include the APR/Rate being charged and the opening date of each account.  (The use for these pieces of information and credit will be covered in a separate post- subscribe for updates and new posts.)

Expenses
Each household bill, any other obligation and all other expenses should be listed.

Expenses are different for each individual depending on a number of factors. Keep this in mind as you make your list of expenses.  Try to think of everything you do in a day.  Include every purchase made, toll paid, donation to charity and everything in between.  Many daily or monthly expenses are overlooked when creating a budget.  For this reason, it is important to ask for and keep receipts (even for cash transactions).  If you are just not good with receipts: keep a transaction register or notepad handy.  Cell phones are also a good plCollect information for full calendar months and/or years to get an accurate picture of your total spending.  

Assets
Assets are things of value that are owned. 

Liquid Assets can be converted into cash quickly and easily.

Non-Liquid Assets are not as quickly or easily sold and converted to cash.

(Liquid and Non-Liquid Assets should be listed but kept separated.)

**Some stocks, bonds and retirement accounts can be considered in either category depending on several factors

*These examples are for illustration and are not meant to be all inclusive.*

What's Next?
Now that you know what you need to have in your budget (your entire life - on paper) and have it all gathered in front of you, the next step is to put it all together into an easily readable format.

Subscribe or check back for the next segment: "How to Plan and Create a Budget".  

Nothing in life is free... Or is it?

How many times have you heard the phrase:
"Nothing in life is free"?

What do you think about that?

The pessimist inside wants to think that we somehow pay for everything, even if it is not with money.  While the optimist inside thinks that is just complete nonsense because there are plenty of great deals around.  Both of these views have valid points.  It really depends on what free means to each individual.

It seems the first thing to come to mind (or mouth) quite often is:

"It's too good to be true!" "It has to be a scam!"

Perhaps it is. But maybe, just maybe, it's not.  So many people are afraid to pursue a great deal simply because it seems too good to be true and they do not want to be scammed.  It is truly unfortunate, yet very understandable, given the high occurrence of fraud in recent years.

Ask more questions to clarify the real deal and make completely sure you are comfortable with it; especially before giving out personal information or signing/agreeing to anything. 

     "What's the catch?"

There is not always a catch, sometimes it really is what it appears, but always read the fine print.  Often, there is crucial information within that tiny print.  Keep a look out for the (*) Asterisk and odd wording.  Do your research.  Do not be afraid to ask for an explanation or more information if there is something you don't understand or are not clear on (before agreeing to anything- ever).

Every once in a while there may be a "catch".  
Often, to get a free deal, you must spend a little bit of your time: perhaps learning about it, giving your opinion or other personal information, watching a demo, etc...  Every person spends time doing everything they ever do, even if they do nothing.  If one considers their time as money, they may not consider anything as free; in which case, the phrase "nothing in life is free" would fit, for them.  In my opinion; if it is a really a good deal, perhaps it is worth taking the time.

Occasionally, an offer is actually a "bridge" or "qualifier" to another offer which may or may not benefit you.  A good deal is offered, sometimes, purely to get exposure which drums up more business in the process.  The point is to get consumers on the phone, the website or in the store.  This is a brilliant business plan that usually works, because everyone likes a good deal, especially if everyone wins.  It is up to us as consumers to educate ourselves as much as possible to take full advantage of money saving (and potentially money making) opportunities.

Some optimistic alternative versions of "nothing in life is free":

"Some things in life are free" 

"Not everything in life is free"

"The best things in life are free"

Thanks for stopping by! 

Please feel free to leave your thoughts and opinions on this subject in the comments. 

Hello.

Welcome.

I'd like to introduce myself.  

My name is Brandi Mills.  

I was born, raised, and still reside in Cleveland, OH.  

Photo by Brandi Mills

I am currently a licensed Mortgage Loan Administrator.  I have formally studied, trained, and worked in several areas of finance, banking, retail, and customer service.  I have been working since I was old enough to take employment.  I hold an Associate of Arts Degree and continue to educate myself through available resources. 

I have always been interested in numbers as well as "The Almighty Dollar".  Even as a child, I had to have money to count (whether play or real, though I've always preferred the latter), a plastic "credit" card, a register, and a file system.  

Math has always been one of my favorite subjects.  I enjoy researching and investigating to gain more information/knowledge on various topics.  I love puzzles.  Solving problems and helping people is my specialty.  

Here, I will share my knowledge and experience in an effort to educate, inform, and help consumers to save some hard earned cash.   I will also share methods that I have personally used that can earn a bit of extra money and even get completely free and discounted items and services.


I am not a licensed financial advisor (yet), so I need to make a disclaimer here:  
The information contained in this blog is to be used for informational purposes only and should not be considered as legal, tax, or financial advice or as a guarantee of any kind.  Personalized assessments should be handled by a licensed professional with full disclosure to individual circumstances.  

Also, I am not affiliated with the companies, people, websites, etc. that are shared in my blog (unless otherwise stated).  The information shared is based on my personal experiences and/or opinions and should not be taken as a promise or guarantee of any specific results in any other case.               

I want to let others know what I know, because I know that it can help someone, somewhere.  

After all, everyone could use a little extra something and Everyone Can Save!