Hoping to buy something that seems just out of reach? A car? A laptop?
In a few simple steps, you can reach your savings goal and feel good about achieving something important.
The sample budget includes most basic expenses, but you should also consider any tuition/fees, clothing, internet, television, bus fare, etc. that is specific to your situation. Feel free to fill in the blanks or create your own budget table to see how your finances look at the end of the month.
When creating a savings goal or attempting to reduce your debt, you should add the amount you need to save or extra you need to pay on a debt into the Expenses category to make sure you still have enough left over.
Reducing your debt follows the same steps as saving up for an important purchase, except that it will enable you to save more in the future by cutting interest costs. A quick trip to bankrate.com can show you how much you are actually paying when you purchase a $10,000 car at 10% interest for 5 years. (hint: you’re actually paying $12,748.23).
The calculators at bankrate.com can also show you how much faster you can pay off your debts and how much you save in interest by adding extra money to the payment each month.
To begin a debt reduction plan, first calculate your monthly budget. Then decide how much you can spare each month and add that onto your payment with the highest interest rate – usually a credit card. Use the bankrate.com calculators to see how much time it should take. After that first credit card is paid down, add the extra onto the next debt you are hoping to conquer.
If it seems that you don’t have enough to spare to pay extra on your debts, it might be time to examine your expenses and see what you can live without.
A budget is a financial plan that lists someone’s personal income, minus personal expenses to come up with how much extra money is left over (or debt is created).
Income – Expenses = Net Income/Loss