BUILDING AN AUTONOMOUS FINANCIAL PLAN-Part 2 cont... Secondly, live on budget - Learn where your money “should” be going. Financial experts say your income or earnings should be divided up in specific ways. For instance, 10% of your income should be going to savings or investments, 25-40% to mortgage or rent, 8-15% to home-related expenses, 10-20% to food, 15-25% to transportation, 8-15% for medical expenses, 3-5% for clothing, 5-10% to personal or miscellaneous, and less than 5% to personal debt such as student loan if you are a student or personal loans. If you’re spending more than these suggested amounts, then it may be time to consider shifting your expenses. You have to shift it in such a way that you don’t stretch yourself too much such that you enter into more debts. Other than that you need to stick to the budget and spend your income on what is relevant. Many women and men alike find it difficult even when they have a well prepared budget to stick to it because they are impulsive shoppers. If you find yourself in this habit the best is that you don’t carry too much excess cash on you but carry enough to meet your budgetary needs. We all want beautiful things but the question is; how beneficial on our budget are these expenses going to be at the end of the day. A budget doesn’t have to be onerous and it’s a key component of a solid financial plan. Start by writing down your monthly income, track and total how much you are spending monthly, and determine your debt-repayment obligations such as credit card, personal loans etc. After calculating your monthly expenditures, subtract that from your total monthly income. Allocate the amount you have left over toward savings. If you’re falling short on savings, think creatively about ways to cut spending. Look at your important needs than your wants so to speak. If you want to attain financial independence you should find ways of cutting on unnecessary spending and channel that amount into savings. Besides figuring out ways to cut spending think of other sources of revenue that could give you some income. No matter how minimal this income could be it would make a very big difference to your savings account. There are so many passive incomes that you could engage in other than the main stream income like a paid job. I have seen many women who have literally transformed their hobbies into real businesses. Many hairdressers, for instance, would tell you that they never did any basic training before starting their business it was their passion that drove them into the business. A hobby is not something that you should just boast about; use it to help you gain more grounds financially. After all that is the reason God gave it to you in the first place; it is something you can use as an investment. It could be a talent and talents are never buried but used through investment to generate income. Good evening facebook family and friends
Posted on: Tue, 20 Aug 2013 19:09:26 +0000