Personal Budget: Is it Difficult to Set?

By: Jerry Leung

In the process of wealth building, it is very crucial to set your personal budget. Without the budget, you will find it very hard to save money of build your wealth. Yet you may find it difficult to set your budget since you do not know how you should start. In fact, you have to do it step by step and the followings are some tips for you to set your personal budget.

First of all you will need to understand your expenditures. In order to analyze your personal expenditures, you have to at least study your expenditure in the last three months. You can check your bank statements and credit card statements. Of course you should also try to take a look on your other regular expenditures such as the utility bills and rents.

The most important thing you have to do in order to set your budget is to understand how much you will have at the end of each month. If your salary is your only income, it will not be difficult to calculate how much you can have on the 30th of every month. However, if you have incomes other than your salary, you have to drop down all the incomes you can have every month so that you can study how much you will be able to save or invest every month.

In fact, it will be better if you can set your budget in a way that you can save some money every month. To this end the amount you earn should be larger than the amount you spend. As a result, if you find that the amount you earn is not larger than your expenditures, you should try to either cut your expenses or increase your income.

To most people it will be more difficult to increase the income unless you try to work longer hours and get a part-time job. However, it will not be a good idea if you try to work 20 hours a day. As a result, it may be a better idea to cut your expenditures. The way to cut the expenditures will vary from situation to situation. And there is no universal rule to cut the expenditures. However, the general idea is that you should try to cut the expenses on something you want to buy. This is because in most cases you are not buying something you really need. Most of the time you are only buying something you want!

If you can set your budget in the right way, you will be able build your wealth step by step!

Money Management
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