All of us wish to be devoid of debts or liabilities. We wish to retire early with at least 10% of your income reserved. We dream to have a new home or car or send your children to the top Universities to study. But the challenge is to convert these intentions to practice with your framework of budget planning. Your future financial fitness is the result of the financial decisions that you arrive in your life.
Chances of success for financial fitness depend on your plan and scheduling of the budget. Do little calculations, which will be worth at the end. Find out the assets and liabilities, make a cross verification with that of your income. The net worth measures your monitory status where you should begin your budgeting. Calculations will be more successful if you do it with regard to the time. Plan ahead with flexibility. Each month is crucial and expect an additional expense which does not meet with your schedule, say for example an emergency situation occurred like medical or accident. So the plan should be flexible to cope up the situation.
Remove filthy expenses, and keep your savings as a priority. Categorise the income into alimony, bonuses, child support, disability benefits, interest and dividends, rents and royalties, retirement income and salaries/wages. Your expenses fall under child/elderly care, liabilities, education, recreation, food and housing, medical/healthcare including insurance, personal, special events, transportation and utilities.
Do not allow life-style inflation haunts your plan. To explain further, as you go ahead and excel in career and profession, you will have an increase in income where there is an increase in spending. Life style inflation will deter your financial health in the down roads, piling you with debt. Being professional, it is obvious that you need to consistently upgrade yourself with that of the peers. Over the time or as your family grow it demands to add more quality to life. Unless you have ample resources, you should always keep an eye on your needs and wants.