Budgeting helps you and your household stay on track with meeting goals and to keep from overspending on unnecessary items. Some people prefer to make monthly budgets to keep track of expenses from month to month while others prefer to look at the entire year when planning a budget. If this is your preference, it is important to look at different aspects of the process and determine when it is best for you to review your progress.
Your yearly budget plan includes the amount of income you receive from all sources throughout the year. This includes your main employer, part-time job, monthly or yearly bonuses and any other source of income you can count on throughout the year. When you list your income, make sure to note the amount beside each item and the frequency you receive this amount of money. Although you are creating an annual budget, this comes in handy when you need to make adjustments.
Expenses include all of your bills and any entertainment or other leisure activities that you and your family partake in. Itemize your list of bills into categories for housing expenses, transportation, health costs, education, credit card debt, personal items and miscellaneous. Make sure to multiply your monthly bills by 12 and your quarterly bills by four; this gives you your actual yearly expenses. Take into account the average number of times that you go out to eat and the amount of money you usually spend each time. The same goes for anything else that is optional; when it comes time to make adjustments, you can reduce or eliminate where it is needed.
This is where it is helpful to know which items from your list are necessities and which you can modify or do without. After you have a list of all sources of your income and where your money is going, you can determine what you need to do in order to reach your goals. Make adjustments if you need to do so and start by looking at the items and activities you can go without.
Reviewing is one of the most important parts of planning a yearly budget. Since you have your budget set up for an entire year, review your progress at regular intervals whether it is each week, each month or even quarterly. It is best to make sure that you at least review on a quarterly basis; this allows you to make any necessary changes and adjustments.
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