|
KNOW YOUR INCOME AND EXPENSES
The next step is to keep track of your income and your expenses for every month. Write down what you and others in your family earn, and then your monthly expenses. Include a category for savings and investing. What are you paying yourself every month? Many people get into the habit of saving and investing by following this advice: always pay yourself or your family first. Many people find it easier to pay themselves first if they allow their bank to automatically remove money from their paycheck and deposit it into a savings or investment account. Likely even better, for tax purposes, is to participate in an employer sponsored retirement plan such as a 401(k), 403(b), or 457(b). These plans will typically not only automatically deduct money from your paycheck, but will immediately reduce the taxes you are paying. Additionally, in many plans the employer matches some or all of your contribution. When your employer does that, it’s offering “free money.” Any time you have automatic deductions made from your paycheck or bank account, you’ll increase the chances of being able to stick to your plan and to realize your goals.
“But I Spend Everything I Make”
If you are spending all your income, and never have money to save or invest, you’ll need to look for ways to cut back on your expenses. When you watch where you spend your money, you will be surprised how small everyday expenses that you can do without add up over a year.
|
1
|
Home Mortgage Payment/Rent
|
|
35
|
Cleaners/Laundry
|
|
|
2
|
Real Property Tax
|
|
36
|
Haircuts/Hair Styling
|
|
|
|
(If not included in mortgage)
|
|
37
|
Cosmetics
|
|
|
3
|
Homeowner's Insurance
|
|
38
|
Child Care Expenses
|
|
|
|
(If not included in mortgage)
|
|
39
|
Lessons (Music, Dance, etc.)
|
|
|
4
|
Home Maintenance/Repair
|
|
40
|
Toys
|
|
|
5
|
Yard Maintenance
|
|
41
|
Pet Expenses
|
|
|
6
|
Pool Maintenance
|
|
42
|
Vacation Budget
|
|
|
7
|
Maid Service
|
|
43
|
Entertainment
|
|
|
8
|
Pest Control Service
|
|
44
|
Personal Gifts
|
|
|
9
|
Household Purchases
|
|
45
|
Charitable Contributions
|
|
|
|
(Furniture, Appliances, etc.)
|
|
46
|
Political Contributions
|
|
|
10
|
Electricity
|
|
47
|
Business Lunches
|
|
|
11
|
Gas
|
|
48
|
Subscriptions
|
|
|
12
|
Water/Sewer
|
|
49
|
Professional Dues
|
|
|
13
|
Sanitation
|
|
50
|
Country Club Dues
|
|
|
14
|
Telephone
|
|
51
|
Health Spa Dues
|
|
|
|
(Including long distance)
|
|
52
|
Home Equity Loans
|
|
|
15
|
Cable Television
|
|
53
|
Credit Card Debt
|
|
|
16
|
Car Phone
|
|
54
|
Other Installment Debt
|
|
|
17
|
Automobile Loan - Car #1
|
|
55
|
Student Loans
|
|
|
18
|
Automobile Loan - Car #2
|
|
56
|
Education Expenses
|
|
|
19
|
Automobile Maintenance (All Cars)
|
|
57
|
College Education Fund
|
|
|
20
|
Automobile Fuel/Oil
|
|
58
|
IRA Contribution
|
|
|
21
|
Automobile Insurance
|
|
59
|
401(k) Plan
|
|
|
22
|
Automobile Parking
|
|
60
|
SEP-IRA, Keogh Plan
|
|
|
23
|
Automobile Tags
|
|
61
|
Company Savings Plan
|
|
|
24
|
Automobile Washing
|
|
62
|
ESOP
|
|
|
25
|
Other Transportation Expenses
|
|
63
|
Annuities
|
|
|
26
|
Food/Groceries/Household Supplies
|
|
64
|
Other Savings & Investments
|
|
|
27
|
Pharmaceutical Products
|
|
65
|
Rental Property Mortgage
|
|
|
28
|
Medical/Dental Expenses
|
|
66
|
Rental Property Expenses
|
|
|
29
|
Medical/Dental Insurance
|
|
67
|
Miscellaneous
|
|
|
30
|
Disability Income Insurance
|
|
68
|
|
|
|
31
|
Life Insurance
|
|
69
|
|
|
|
32
|
Malpractice Insurance
|
|
70
|
|
|
|
33
|
Personal Liability Insurance
|
|
71
|
|
|
|
34
|
Clothing
|
|
72
|
|
|
Download the spreadsheet Monthly Expenses
Know Your Income and Expenses
Small Savings Add Up
Pay Off Your Credit Card Debts
Make a Financial Plan
|
