Reason for this Goal: Developing a personal budget and understanding how to budget your money so that you spend within your means is a foundational principle of money management. The tracking of your expenses (what you spend your money on) against your income (what you earn in your job or business) is important to ensuring you stay within your budget.
It is easy to start spending more money than you make, and that will lead to debt problems. By inputting these financial numbers into an Excel spreadsheet, or one of the other on-line tools that are available from your bank or as a downloadable app, you will gain confidence in your spending and will have controls in place to spend within your budget.
INCOME – the pay from your employer, and income from other sources, such as
EXPENSES – the things you spend money on, such as:
Your budget = your plan on what you will spend your money on.
Your cash flow = INCOME less your EXPENSES.
Your aim is to have a POSITIVE cash flow so that at the end of each month, you are not in a deficit. Your personal budget will be completely unique to you and will change throughout your life numerous times.
The key is to understand your income coming in and your expenses going out. If you don't do this, it is too easy to assume you have the income you need to cover additional expenses you are considering taking on.
You should track your personal budget and cash flow on a daily, weekly, monthly or annual basis.
Suggested Goal(s): Develop a personal budget (system) for tracking your cash flow.
Your Outrageous Goal: Maintain your cash flow tracking system for life.
Return to financial goals.