Personal Finance Guidelines for Stretching Your Paycheck

In this post, I would like to present personal budget guidelines, and hopefully, point out some potential holes or problems in your budget. The goal here is of course, to help you find ways to increase your disposable income, or the amount of money left over after all bills are paid. After reviewing this post, I hope to ignite some ideas in your mind about ways to cut expenses, and the things that are really eating holes in your budget. The following chart is a mixture of what other personal budget experts think, and my personal opinion of how to allocate your money:

Percentage of Income

Expense Description

10% God / Church

25% Housing

10% Utilities

18% Transportation

10% Food

2% Clothing / Attire

5% Misc. (eg Phone, Internet)

5% Medical Expenses

5% Other Debt

6% Savings

4% Entertainment

In the above table, I have listed the expenses in order of importance (to me, anyway). There are a couple of key things I want you to notice in reference to the above table:

Taking God Out of the Equation

The absolute worst budget mistake you can make. Without God and his blessings on your life, you are doomed. Do not cut your budget here!

Housing

This is where many people make a huge mistake. Many lenders will allow you to borrow up to 50% of your monthly income towards a house. This is ludicrous! Buy something within your means, or wait, and offer on several different houses at a discounted price to fit into your budget.

Transportation

Most people will not be able to fit into the 18% allocation for transportation, because they have a car payment that is 10-20% of their monthly income already. By the time you add the cost of gasoline and general maintenance, you are well above the 18% mark.

Miscellaneous

Cable TV, Long Distance Service, House Alarm System Service, Incredibly High-Speed Internet Service, etc. are budget killers. Stick to the basics in every service, and do without as many of them as possible!

Food and Entertainment

Do you need fillet mignon, caviar and two nights and the Weston 2-3 times a month? Do you have to have name brand cereal, Netflix, and StarBucks? Count up the cost of these and you will be shocked. Stay with off brands in the grocery store, and limit or cut back the high dollar, high frequency entertainment, I guarantee it will come back to haunt you. On a personal note, buying movies at Walmart in the $5.50 bin is a much better bargain than paying $3.99 at the rental store for only 5 nights of viewing.

I think you will find it remarkable how implementing just one or more of these personal budget guidelines and suggestions can make a difference in your family budget. The main thing is to group and count the cost of all the various expenses in your budget, and start trimming the fat. I track all expenses in my budget (except for entertainment) to make sure I do not overextend myself. If you are wondering why I do not track my entertainment expenses, it is because I hate wasting money, thus I have no budget for entertainment. This forces me to think twice about any entertainment expense, because I know it will put me over my total personal budget!

Tags: Finance, Guidelines, Paycheck, Personal, Stretching

Guidelines For Proper Personal Budgeting

The aim of budgeting is to look into your finances in a wholesome manner taking into account your income, expenses, savings, investments and come up with a good plan that successfully meet your needs. Remember that the pursuit of money should not be your major concern but rather, its planning and management in order to reach lifetime goals and dreams like buying a house, educating your children and a comfortable life after retirement.

You must begin by identifying your personal and family goals. Here, look at what are most important and set priorities. Remember to classify these goals as long term and short term and try to reach them.

Analyzing your present financial position is of out most importance. Know how much you earn, your expenses, savings, current investments and debts, if any. Use such information to identify strategies for achieving your objectives. You must ask yourself if you can reduce your expenses and increase your savings.

Many professions today have not realized the power of being engaged in business and have continuously focused on seeking on looking for opportunities of having overtimes in their work schedules in order to enhance their incomes especially in these bad economic times. But investing your income could save you a great deal because with proper planning you can earn more money. This will ease you financial plan. However, you should analyze your investments to see whether they are helping you achieve you goals. Remember that you also risk losing your investment principal.

One has to look for a way of saving on his/her taxes. Identifying the strategies that you could use to reduce on taxes is of absolute import

Tags: Budgeting, Guidelines, Personal, Proper