The area of personal finance covers a broad variety of topics involving money which include areas such as budgeting, expenses, debt, saving, retirement and personal insurance among lots and lots of others. It can almost seem a little overwhelming for those of us without a good plan how to tackle it. Understanding how all of your incomes and expenses work together can lay the groundwork for a solid financial foundation for you and your family.
My advice if you feel that you’re a little over your head financially is create you own personal financial statement. A statement, done the right way, acts as financial roadmap; guiding you from where you are now to where we want to be tomorrow. A personal financial statement can also provide fixed points of reference when measuring progress over a period of time. They also help you make smart decisions about financial matters.
Here is how you can create you own personal financial report quickly, easily, and most important, correctly:
The first thing you need to do is find the type of financial report which will be the easiest for you to maintain on a monthly basis and for this I recommend Microsoft Office. Their programs make it quite simple to use. You can even find some pre-formed financial reports and monthly ledgers at most of the leading office supply stores. Organize all of your monthly bills together and then and separate them into categories for housing, utilities, medical expenses, school loans, and car payments. There should also be a separate category put together for things like dining out and other miscellaneous expenses. Now that you have your entire monthly expenses organized, begin to enter them into your personal financial report by whether or not they are tax deductible. Also make sure it contains payments you make on both an annual or semi-annual basis, like insurance. This is done by dividing the annual payment into twelve equal installments. Gather all of your sources of incomes such as pay stubs from work, pensions, retirement income, rentals, child support, etc., and add them all together. Simply divide your payout by twelve, if you receive an annual payout, for determining what your monthly income would be. Once again, you’re working in the financial report. In the appropriate space enter you total income, the net amount from your paycheck. Your net amount would be the amount you take home after all the taxes have been deducted. The total amount of all of your monthly expenses should next be added together. Once you have that number, enter that into the financial report. Subtract the number you get as your total monthly expenses from the total monthly income you figured out earlier. That amount is your monthly cash flow which could then be saved or used for extras expenses. Keep the financial report up to date every month by choosing at least one day a month for updating.
By: TL Kleban
Posts Tagged ‘Monthly Expenses’
Creating Your Own Personal Financial Report Quickly and Simply
April 17th, 2010Home Finance Software – Taking Control of Your Finances
March 27th, 2010
Personal finance software is also known as home finance software. This is because it is simply personal finance software that you use in your home. You can use different applications under the category for different purposes.
Some of the applications cater to money management and accounting, whereas others concentrate on expense, income, and investment tracking. You can also use some of the applications for calculating mortgage payments, loan rescheduling, and loan prepayments. This you can do because the applications are equipped with a built-in mortgage calculator.
You can also use home finance software applications for budgeting purposes. They can help you prepare the monthly budget based on calculations involving the family’s income and the expected monthly expenses. The software will churn out a budget report at the click of a mouse. The important advantage of budgeting using home finance software is that you do not need to manually track your monthly budget.
Home finance applications maintain accurate account balances. However, for this you need to enter all purchases, credits, and payments in the application’s database through the checking account built into the application’s user interface. You are spared the hassle of making calculations as the application does this for you.
This is why reconciling of your personal finance accounts becomes easy with the burden of doing the math without making any errors whatsoever is taken over by the software. This keeps your mind relaxed and then you are able to concentrate on other important tasks that require your immediate attention.
Tax tracking becomes easier if you are in the habit of using home finance software. This is because tax categories are part of the software. Even if some of the tax categories are not included, all you have to do is to set them up. Such categorization of tax transactions helps you in saving time when the time comes for filing your annual tax returns. A decision on whether you need to make adjustment of tax with holdings can be done throughout the whole year through such categorization.
Some of the sophisticated home finance software packages allow you the facility of downloading data and transactions from banks. This helps integrate your checking account with those maintained by your bank. This convenient feature also helps you avoid manual data entry to a significant extent and thereby saves time.
Online bill payments become very much possible through most home finance applications. Although you may have to pay a nominal fee to access the service, it is still worth the convenience.
Another advantage of using personal finance applications in homes is that you can track all your investment transactions through online updates. This helps keep your investment account balances always updated.
All in all home finance software is a boon to families. The greatest advantage of using it is the sense of mental relaxation that you get by being fully dependent on it to make your finances become systematic.
By: Dean Forster
