A few years ago a friend of mine accidentally saw one of my paychecks, was shocked to see that won me over. He also noted that his wife worked and mine did not. This approach friend, I had a couple of times in need of a loan to go through until payday. Because I had been able to help him has always been assumed that I did that more. Once he realized that the situation was reversed, he asked me how they could possibly do, and we went.
I then asked him what kind of budget that he and his wife used to finance their homes. He replied that he did not have a draft budget planning for the household bills. Well, I was surprised because this friend always seem to be very organized. I asked him how he thought he could manage your money without a budget. I explained that the budget is the cornerstone of knowing where they are financially. I mentioned a phrase I heard from my father years earlier … If you are unable to plan, then you should prepare to fail. I think it’s a little offended and a little embarrassed, but he did see my point.
I told him that for many years my family has operated on a shopping on a budget and whether the principle has not been easy. With a budget adjustment is harder to be responsible for every dollar goes to show that it is not pleasant for most people. The more it becomes easier, because you start to take pride to stick to your budget and you begin to see the fruits of their work. I asked him to try starting in the next plan, which is the same, I used when I started. I told him to use it for 6 months and then see if it worked.
The plan is simple: money should be divided between the percentage of use. 33% for housing, 17% for transport, 25% for monthly bills, 10% for donations, and 15% for savings and investment. I asked him to list all its misc. The costs of services and if the money is wasted. The savings account is also used for emergency needs such as home or auto repair.
From the beginning, my friend said that 25% do not cover their monthly bills. I told him that he would use the party designated for savings and pay your credit card. It turned out that Max was on several cards and has been the largest reduction of their income. At the end of 6 months, I met with him and told him he had paid three letters and has listed her monthly misc. expenditure. With this list, which has realised that they were spending $ 250.00 per month for things that were not needed. This combined with savings on payments by credit card has enabled them to put up $ 1000.00 savings. They will soon all your credit cards and paid will be able to save more money in the savings column.