The 5 minute budget

One of the most important financial tools you can use is the budget. Budgets may sound quite technical economic novice, but a budget is a very practical that almost anyone can create in about 5 minutes. Here are some tips.

While in theory, you can create a budget of about 5 minutes, no need to rush. Budgets are exceptionally easy to create, you only need the following: a sheet of paper with a pencil a calculator that is. In your paper, you must create two columns.

The first column should be called on income and the second column should be called fresh.

The revenue column

Before your income column, you want to list all sources of income. Most people usually list their resources in a time scale of a month. But if you receive income that is not regular, like once a year payment, you can choose to create the average budget for a calendar year. For those who create a budget with a horizon of one month, each list of your income. Naturally, they contain your main job income and income from part-time job. Other items you should list the resources are products that you sell on Ebay or income from websites. If you receive rent a property you own, it should be mentioned as well, and you should definitely list all the income you earn interest on money in the bank or stock dividends. After entering all your receipts for the month, you must create a new line and calculate the total income for this month.

Expenditure column

while you can have only one or two sources of income per month, you will definitely get a lot more expenses. The costs are something to spend the money. This may include mortgage payments, car loan, insurance, lunch, transportation, utility bill, cable bill, that the purchases you make on a regular basis, such as morning coffee, etc. Make sure that you are trying to think of all the expenses you have any month. Many people also carry around a small book, containing all the expenses of the week, just to see what they actually use their money. Once you've listed all the costs of creating a new line, and calculates the total amount of expenditure.

Compare your income at the expense of tail Column

Now compare the totals for each column of each of them. If revenues are greater than costs, are in good condition and no extra money can be saved. However, if the costs exceed the revenues, you have a lot of risk and are probably in debt. Be sure to pay a portion of the costs to offset the budget. You can do this by looking carefully the money you spend per month and figure out which objects are to be cut. You should also look for ways to increase revenues as well.