What Do Rich People Have That The Poor Does Not Have Apart From Money? The rich has money which the poor does not have but aside that, there are other urbane possessions of the rich that the poor don't have and I will just write on10 of such. The rich has money because they have learnt how to make money flow to them effortlessly but the poor would never know or do that These other urbane possessions of the rich include: 1. Wealth Mindset The rich has learnt that his mindset is everything and thus he guards jealously never allowing weeds and negative thoughts to live therein and making every effort to avoid the victim mentality. But the poor has accepted his condition as his fate and thus makes no efforts to extricate himself from the poverty pool. 2. Personal and Financial Discipline The rich has taught himself both physical and financial discipline. He does not speak out of tune, he has a cultured mannerism, is often courteous and humble. He also spends his mon
How To Create An Implementable Personal Budget
Personal budgeting
comprises three essential steps, regardless of whatever approach you use:
1. Keep track of your
earnings and expenditures.
2. Make an effort to
maintain the second number below the first.
3. Every month, lather, rinse, and repeat.
Unfortunately, just because budgeting is straightforward does not imply that it is simple. And if you've never set a budget before, you could be confused about what you should do and how you should accomplish it.
Fortunately, contrary to popular belief, creating a budget from scratch does not have to be painful or complicated. Here's how to make a simple and uncomplicated budget that works for you.
Step 1: Accept the Budgeting Process As It Is
Budgeting is frequently thought of as a one-and-done task. You sit down in front of your computer, surrounded by your accounts and receipts. You work out how much money you've been wasting. You make your future financial projections.
Let's take a look at a hypothetical person named John as an example.
When John first tried to construct a budget, he discovered he had spent over $450 on dining out in the preceding month. So he resolved to spend no more than $50 per week on dining out—and then went on his merry way, satisfied that he'd set a budget.
As John discovered, if this is what you consider budgeting, getting ahead is quite difficult.
He wasn't regularly watching his spending after setting his initial budget, so he didn't realize he had over his self-imposed restaurant spending limit. He couldn't figure out why he was still having trouble making ends meet. It eventually came to the point where he had to get down with himself and build a budget all over again, starting the process all over again.
Accepting that budgeting is an ongoing plan for living the financial life you want is the best approach to set yourself up for budgeting success. Budgeting should be viewed as a monthly maintenance duty, similar to cleaning your laundry, rather than a one-time or occasional chore.
Laundry management, like money management, is a continuous obligation that cannot be avoided, neglected, or forgotten without major consequences.
Going into your new budget with the understanding that you are committing to a regular and continuous process will aid with budget maintenance, which is far more important than just setting one.
John needed to set weekly time to go over his budget again in order to prepare for this new, continuous duty.
Step 2: Determine Your Monthly Earnings
You're ready to start delving into the nitty-gritty figures once you've accepted the reality of budgeting. To begin, figure out how much money you make each month.
This section will be
fairly straightforward for anyone who receives a salary from a traditional
employer.
To find out how much you make per paycheck, simply glance at your most recent pay stub. If you're paid weekly, multiply it by four; if you're paid biweekly or twice a month, multiply it by two.
Every month, on the 1st and 15th, John receives a paycheck of $2,550. His monthly take-home wage is $5,100 when multiplied by two.
This figure provides him with a starting point for estimating his budget.
Your monthly income is a little more difficult to calculate if you work as a freelancer, have side hustles, get hourly pay or overtime, or rely on tips or commission. In that instance, compile your income data for the previous three to six months and average it.
This might help you figure out how much money you make on a monthly basis.
Step 3: Add Up All of Your Required Expenses
Your essential expenses are the absolute bare minimum you require each month to live comfortably. These include both fixed and variable expenses.
The majority of people
have a rudimentary understanding of their ongoing or fixed expenses. For
example, you know exactly how much rent or mortgage you have to pay each month.
Now is the time to go over all of your fixed expenses and keep track of them. These can include the following:
• Rent/Mortgage
• Utilities, such as cell phone service and data/Wi-Fi access (if these fluctuate, calculate the monthly average over the last 12 months)
• Automobile payment
• Automobile insurance
• repayment of a debt
• Child support or alimony
• Costs of daycare
• Month-to-month memberships (such as gym membership)
Fixed costs are the easiest to track since they are consistent from month to month. However, you'll see that some essential purchases, such as groceries and medicines, are not included in these charges. These are the variable, but necessary, monthly expenses that can alter.
Calculating the monthly average over the last 12 months for variable expenses is a good idea. (If you have expenses that don't occur on a monthly basis, sum up your entire annual spending and divide it by 12 to get your monthly average.) Include the following out-of-the-ordinary yet required expenses:
• Groceries • Medications • Medical Consultations
• Renters' and homeowners' insurance
• Automobile maintenance and repair
• Repairing and maintaining your home
• Payments by credit card
You'll have your basic spending budget once you've estimated how much you spend each month on these items.
The monthly spending budget for John is $3,430 ($2,190 in fixed monthly expenses + $1,240 in variable monthly expenses).
Step 4: Create a line item to Pay Yourself first.
Paying yourself entails setting financial objectives and making strategies before spending money you don't have. Many people neglect to include these goals in their budgets, expecting that they will be able to accomplish them with whatever money is left over at the end of the month. However, if you plan to use spare funds, it's likely that your objectives will be overlooked.
Developing line items in your budget for your primary goals is the next stage in creating a sustainable budget.
Begin by writing down your financial objectives. Here are a few examples:
• Putting money aside for an emergency
• Debt repayment
• Begin making contributions to your retirement account.
• You're saving money for a major buy.
Once you've decided on your goals, figure out how much time and money you'll devote to each one each month. Divide the amount of money your objective will cost by the number of months until the deadline to get how much you should save each month if you have a deadline in mind.
Add these "pay yourself first" sums to your fixed expenses. To assist you acquire the habit of prioritizing your financial goals, think of them as fixed expenses and line items in your monthly budget.
5. Make a list of all of your non-essential spending.
Now that you've estimated your baseline spending and the line items for your financial goals, you're ready to bring in discretionary expenses.
These are the purchases you want to make rather than have to make. Entertainment, dining out, clothing, and other such items are all possible inclusions.
While some discretionary purchases (such as clothing) may be required (unless your employer is extremely generous), you have complete control over how much you spend on these items.
These costs are a little trickier to figure out than the previous ones. This is because you'll need more information than just how much money you've already spent.
Begin with those figures and determine whether they are too high, too low, or just right.
For example, you might discover that you spend $150 each month on lunch. This phase allows you to see how much you're spending on convenience and make adjustments to your budget. If, on the other hand, you discover that you've gone three months without haircuts to save money, but you love how you look when you go every six weeks, you might want to boost your haircut budget.
To establish your monthly spending plan, add your ideal discretionary spending amounts to your expenses.
Step 6: Evaluate and Make Changes
Compare your outgoings to your inflows. Your budget is balanced if the spending number is less than or equal to the income figure. In that case, you're ready to put your budget into action.
If, on the other hand, your costs exceed your income, you'll need to cut back on your spending.
This can be accomplished by experimenting with any of the non-fixed expenses. One important point to remember about your adjustments is that you should prioritize discretionary or variable spending (such as your grocery budget) before reducing your savings for your financial goals.
Protecting your budget's pay-yourself-first line items will help you meet the major financial milestones that are essential to you.
Step 7: Put your plan into action and keep track of your spending.
You're ready to put your spending plan into action now that you have a balanced budget. Begin spending and saving according to the budget you've established.
However, sticking to your new budget entails more than just sticking to your spending limitations. You'll also need to keep track of your expenditures to notice any flaws.
The easiest approach to stay organized is to use whatever tool suits you best, whether it's a budgeting app, a spreadsheet, or pen and paper.
For example, John has been eating lunch in his job cafeteria for $10 every day. He has a $50 weekly dining out budget, but due to his cafeteria spending, he spends it at work rather than on weekends or evenings.
Rather than punishing himself, he tries to understand out what makes him want to buy meals there after deciding not to.
John may notice that he forgets to take lunch every day, so he starts packing a week's worth of meals every Sunday.
Alternatively, he may discover that he has brought his lunch, but cold food is never as enticing as hot food. In that situation, he chooses to cease bringing cash to work in order to assure that he consumes the food he has brought.
You'll see patterns over time as you implement and track your budget. These will assist you in making necessary financial adjustments and determining what is most important to you.
Budgeting Has the Power to Set You Free
Budgeting has a bad reputation, yet it's all about spending money on the things that are most important to you. Budgeting is a terrific opportunity for you and your family to learn something new.
Take the time to address your individual and shared goals, as well as the funds that will support them, if you're budgeting as a couple (you and your spouse).
There are quite a number of budgeting models - there is the 70/20/10 model where 70% is allocated to general expenses, 20% to savings and 10% to charity; there is also the 50/30/20 model, where approximately 50% of your income goes toward needs, 20% goes toward debt reduction and savings, and 30% is available for wants. There's also the 10/10/30/50 model where 10% goes to your tithing, 10% to your pay yourself first savings account, 30% to your savings for investment account and 50% to general expenses
A zero-based budget, in which each incoming dollar is assigned to a single job, is another helpful budgeting model.
If you work as a freelancer or have a variable income, your budget should contain a larger savings buffer for the months when your income is lower than projected, as well as a strategy for maximizing your income during the months when it is higher.
You will have the framework you need to make your money suit your life by calculating your income and expenditures, defining how you will reach your financial goals, and budgeting for your discretionary expenditures, regardless of whatever technique you select.
I hope this helps you get started without further waste of time.
#wealthisearned
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the First Oguzie: JP
At Wealth Is Earned Blog, we believe that being wealthy is a choice just as being poor irrespective of the circumstance and situation and it all streams from the mindset. Throw 2 men into the same gutter, the one with the wealth mindset will make it to the top while the one with the poverty mindset would be there and groveling with other inhabitants of the gutter - it is a mindset thing. God has given you the POWER to make wealth, it is your ABILITY to APPROPRATE what God has given you that makes the difference and it is wholly and entirely dependent on you
About Dr. Jerry - the First Oguzie: JP
Dr. Jerry - the First Oguzie is a Physician, an Author, a Writer, Thinker, Founder, Convener and Success Coaching addict. He is passionate about helping people become the best versions of themselves through coaching, mentoring, teaching, enlightening and enhancing their self worth. And the Platform he uses to reach out to people is his Ministry of Encouragement (MoE). He has deep interests in Personal Development including mindset reset and habit change, Personal Finance, Wealth Creation, Health and Fitness. He believes that financial knowledge (literacy) combined with self - discipline is the key to achieving financial freedom.
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1.The post is about how to create an implementable personal budget. This is a serious business and not all that as easy as outlined. However, anyone who succeeds in keeping to all that are outlined is on the road to acquiring sustainable wealth. To achieve this, one has to make efforts to know one's GROSS INCOME per month whether one works for an employer, works for himself or have multiple streams of income. It requires DUE DILIGENCE in the sense that one has to identify fixed expenses, Variable expenses and discretionary expenses and equally keep track of them to make headway having known ones gross income. There are a lot of models that could assist in creating implementable personal budget like *70/20/10 model
ReplyDelete* 50/30/20 model
*10/10/30/50 model.
2. My Gross Monthly Income is $1,250. Thus my Gross annual income will be $15,000
My Gross annual tax is 24% which is $3,600.
$15,0000 minus $3,600 will be equal to $11,400. This is my net annual income . Using The 10/10/30/50 Model ,
$1,100 will be for tithing.
$1,100 will be used pay myself first into my Savings.
$3,420 will for Savings into my Investment Account while
$5,700 will be for General expenses..
3. Five benefits of drafting a balanced personal budget are :
1. It helps one to keep track of one's savings because one takes special care to stick to the budget theteby avoiding all aviodables to save no matter what.
2.It equally helps one to determine ones monthly earnings whether working for oneself or for another person.
3. It equally helps one to put plans to action by keeping track of income and expenses on a regular bases.
4. It helps one to plan everything thus helping one to be free of debt by making the budgeter to keep to plan.
5.Finally, it helps one to evaluate one's income , expenses from time to time and adjust and make changes .
It's a pointer/plan that is workable in achieving a standard and personalized budget. All factors and processes necessary to facilitate/achieve this were painstakingly enlisted herein.
ReplyDeleteI will draw out the 10/10/30/50% model in this regard thus;
10% for tithe.
10% for paying myself.
30% for savings and
50% for general expenses. In this column, I will capture the 24% tax money. If my gross monthly income is $1250, my annual will be $15000. My gross annual tax is 24% from the gross annual income which should be $3600. $15000. Since this tax will be taking before the earnings gets to you, then, you minus $15000-$3600 to get the annual income after taxing. Using the above model, I allot on that order after the tax has been deducted ahead. 10%for tithe will be, $1100,
$1100 for self payment, $3420 for savings and $5700 for general expenses.
5 benefits of drafting a personal budget.
1). It puts one on the knows of his monthly earnings. Once one knows what comes in both as a freelancer or side hustle or fixed salary, he can set up a budget.
2). Planning is essentially one of the basis of being successful. This is most achievable with budget. In budget, one becomes disciplined in running his financial life. Without budget, this is not achievable.
3). Budget helps one stay focused and follow strictly on actions meant to drive the financial life adequately.
4). Efficient tracking of one's income and expenses becomes a culture and a lifestyle. Strict adherence becomes an order which facilitates one in cutting down expenses whenever an opportunity rears its head, for instance, money can be saved from staying longer than expected in making a hair cut. If this is done weekly for a dollar, if one stays away from barbering his hair for 6weeks, then, $5dollars has been added to savings. This only achievable through tracking of financial inflow and outflow.
5). Consistent referrals and self evaluation becomes pertinent. One has got the need to get to the computer screen or spreadsheet or pen and paper and cross check how well this is being done. From thence, referral on how well becomes so pertinent.
Thank you sir for this indebt budgeting standards. It's a new working week to flow on.
Good try
DeleteKELLY
ReplyDelete1. The post seeks to enlighten all on how to develop & execute a personal budget. The post gives a detail step by step approach to developing a personal budget using John as a case study. Finally, the post throws up different personal budget models like: 10%, 10%,30%, 50%; also 70%, 20%, 10%; as well as 50%, 30%, 20%. It also briefly describes the above budget models for ease of understanding.
2. To answer this question pls permit me to utilize my personal developed budget model which has been working for me over the years.
From the figure given, my gross annual salary is $15,000 and my gross annual tax is $3,600 (24%). Therefore, my annual net income is $11,400.
My personal budget model is: 50:20:20:10.
That is $475 (50%) for general expenses (which covers fixed & unfixed monthly expenses). This includes NEPA recharge, DSTV subscription, insurance premium, food & entertainment, etc. $190 (20%) for monthly savings. $190 (20%) for investments savings. $95 (10%) for tithe.
3. The five benefits of crafting a balanced budget includes:
(a) It enables you to keep abreast of what constitutes your monthly earnings or income.
(b) Since a budget is a financial guide of income & expenditure for a month or period, it helps to instill discipline and strict adherence towards the goal.
(c) It enables you to track your expenses and make adjustments where necessary
(d) Since budgeting has a goal or objective, it keeps one focused towards attaining the preset goal.
(e) It gives one the privilege and opportunity to evaluate ones income & expenditure to see to what extent one has failed. Here adjustments to make new additions and/or subtractions are made etc
Good try
DeleteMorgan Oscar
ReplyDelete1. This post gives a detailed concept and importance of budgeting. Budgeting helps to keep proper track of your income and expenses. Several budgeting tools have been outlined here to help create a sustainable budget to accommodate paying taxes, tithes, yourself, debts; saving for emergencies and other future financial projects. Always be truthful when listing your essential and nonessential spending weekly, biweekly, monthly to help in preparing your budget. For preparing a good budget, always use budgeting tools that best suits you; whether a budgeting app, a spreadsheet or pen and paper. Always evaluate and reflect in your budget, recurrent changes.
2. My gross monthly income is $1,250.
My gross annual income is $1,250 × 12 = $15,000
My gross annual tax is 24% of $15,000 = $3,600. Deducting $3,600 from $15,000 leaves me with $11,400 as my net annual income
In preparing a balanced personal budget, I will use the 10/10/30/50 (%) budgeting model where
10% of my net annual income which is $1,140 goes for my tithe,
10% = $1,140 also goes to paying myself,
30% = $3,420 goes for my savings for investment accounts; and
50% = $5,700 goes to general expenses.
3. *It helps me to keep proper track of what I spend considering my income so as not to override my income with excessive spending.
*As I am able to track my spending, I am able to set achievable financial targets to help me better build my life and that of my family.
*Personal budget gives me room to comfortably spend because when I have made my budget, it is easier to spend knowing that I am spending what is meant for paying myself and not what I should be saving.
*Preparing personal budget saves me worries that come with emergencies, thereby easing the stress of financial worries, because I have already prepared ahead for emergencies.
*With personal budgeting, there is less need to borrow because I am disciplined with my spending.
This comment has been removed by the author.
ReplyDelete1. Creating an implemented personal budgets; the type that will work is not easygoing, as it requires discipline, tenacity, and a lots of sacrifice to achieve. People like me, that don't receive monthly salary, but are on freelancing and contract paid jobs. Which are not always guaranteed to be readily available will sure find it difficult to really tell the total amounts they earn monthly or annually as the case may be.
ReplyDeleteHowever, with this article one can calculate based on the average of his or her annual earnings. Keeping track of ones earnings; accepting the budgeting process as it is, determining your monthly earnings, Adding up all of your required expenses, Creating a line item to pay yourself first, making lists of list of all your non essential spending, evaluating and making required changes, putting your plan into action and keeping track of your spending, are the sure steps to create an implementable personal budget.
2. If my gross monthly income is $1250 and my tax is 24%. Therefore, my gross annual income will be 12*1250= $15000. Since my tax is 24%=0.24 units tax. Therefore, I pay 0.24 of $15000 annually as tax (0.24*15000= $3600). Therefore, my actual annual income is gross annual income minus tax( $15000-$3600) = $11400.
Now my balanced personal budget using 70/20/10 model
70% expenses $7980.
20% savings $2280.
10% charity $ 1140.
No3.
Benefits of crafting a balanced personal budgets.
1. It helps you to know your financial worth
2. It helps in savings
3. Sense of belonging.
4. Expenses check
5. Earning tracking.
#Nestor Amuche Ike
# COWEC
ReplyDeleteBudget is an estimate of my income and total expenses over a period of time. Budget is seen as very simple but people find it difficult to strictly adjust to it once they are on it. Personal budgeting requires a lot of sacrifice, discipline and an act of decurom. Being financially disciplined can help me achieve my personal budget goals. When l take into consideration my monthly earnings and my expenses, it takes a strict budget to keep me moving. Cos to keep real with my personal budget, is to keep away from unecessary expenditure to wage my bill and pay myself first to also invest more.
2. Gross income: 1250
% on Tax: 24= 0.24
Per annum- 12 months
Firstly, l multiply my annual gross income with 12 months which is 1250*12 = $15000
Then, l pay the 0.24 as tax on the 15000 which is also
0.24*15000= 3600
Finally, my real or actual income within the year after tax is= 15000-3600
Which is $1140.
For me the model l will go for is 50- 30-20
50% to pay myself = $5800
30% for savings and investment = $3600
20% for expenses= $ 2000.
3. 1. It helps to elevate me for financial freedom.
2. It helps me to retire early
3. It helps me grow my portfolios.
4. Check my and track my expenses
5. It helps me save a lot to prepare for emergencies.
#COEWC
1. When it comes im budgeting, in as much as we have a written down plan on how to spend money and what comes im as cash flow. It is always difficult to see people practice what they have in budget. It will help to regulate and manage, but the truth is that practically,, its difficult in real life. When you have a bud, it helps you to watch how your spend money and how you can manage your expenses either by being flexible finding alternative ways of managing your funds. Budgeting is important and should be practised.
ReplyDelete2. Assuming we want to use the 10/10/30/50 principle where the first 10 is for tithe, the second 10 os fkr paying yourself first, the 30 is for saving, the 50 is for expenses. There we have that 10/10/30/50 will correspond to $30 $30 $90 $150 for tithe, paying yourself first, savings and expenses respectively.
3a. It helps you to be financially up to date with your cash flow and expenses.
b. It helps you to regulate and make sure that the expenses does not pass the cash inlet.
c. Having a budget will help in running your daily, weekly, monthly or yearly maintenance as the case maybe.
d. You can estimate your expenses.
e. You can save as well