Apr 08

Welcome to Business Strategy with PHC-BR in today’s video we will talk about personal finances and how you can use this simple strategy to improve your financial well-being. Are you familiar with the definition of budget?

” An estimation of the revenue and expenses over a specified future period of time. A budget can be made for a person, family, group of people, business, government, country, multinational organization or just about anything else that makes and spends money. A budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another.”  definition by Investopedia

How can you use budget to your advantage? Watch the video bellow and  take some notes.

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Pedro Marques
PHC-BR International
Skype: chagas-es

Click here to work with me personally.

Check our website: http://www.phcbrinternational.com
Watch our bloghttp://meetpb.com/growyourbusiness/
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Aug 10

Personal Budgeting

failure to plan, is planning to fail…

Anyone who earns an income should have a budget. The amount earned is of little relevance. Budgeting has many advantages, chief among which is the ability to determine whether non-discretionary expenditure exceeds income. Non-discretionary expenses are those that have to be made to maintain your present standard of living. Discretionary and non-discretionary expenses will vary from individual to individual, however certain categories will be consistent from one person to another:

  • Rent / Mortgage payment
  • Motor vehicle loan/lease payment
  • Utilities (Light/Water/Gas/Oil)
  • Telephone (Wireless/Land)
  • Food
  • Clothes

The categories above should be among the first items included in your budget. For the time being, you should ignore discretionary expenses. Use Microsoft Excel or any other spreadsheet application and prepare two columns; the first should be labeled Income/Expense category and the second should be labeled Amount $. You should determine the period for which you’re preparing the budget; weekly, monthly, quarterly etc.

The first cell in the first column should have Income and below that you will list your different incomes. Example:

Total Income

Salary $5,500.00
Part-time employment $400.00
Investment Income $100.00
Total $6,000.00

Now that you have your incomes listed, you should now list all your non-discretionary expenses:

Non-Discretionary Expenses

Rent/Mortgage $1,900.00
Car loan/lease pymt $400.00
Utilities $150.00
Telephone $180.00
Food $360.00
Clothes $400.00
Total $3,390.00

Food and clothes will have to be estimated, but that should not prevent you from being fair in your estimates. The other items should be easy to determine, as they are billed to you each month.

In this example, the total income is $6,000 and total non-discretionary expense is $3,390. Excess income is $2,610 and this amount will be used to determine your discretionary expenses.

The first item in the discretionary category should be savings. There is a long-standing debate on whether savings should be considered a non-discretionary or discretionary expense. While the arguments on both sides are strong, it is really left to the individual. Saving is a very important part of financial management, and it behooves the individual to recognize its importance for present budget management and future earnings.

How much should be saved depends on your net income after non-discretionary expenses, however it is a good idea to save at least 25% of your monthly income. In our example, total income is $6,000, so at least $1,500 should be saved and the balance can be used for non-discretionary expenses. The table below lists all income and expenses, including savings:

Total Income & Expenses

Total Income $6,000.00
Non-discretionary expenses:
Rent/Mortgage $1,900.00
M/V Loan/Lease $400.00
Utilities $150.00
Telephone $180.00
Food $360.00
Clothes $400.00
Surplus income after Non-Discretionary expenses $2,160.00
Savings $1,500.00
Available for discretionary expenses $1,110.00
Discretionary expenses – Examples
Dinner w/friends $90.00
Movie tickets etc. $60.00
Cable TV $45.00
Club/Sports Bar etc. $150.00
Special pair of shoes etc. $120.00
Internet charges $22.00
Vacation $225.00
Total Non-Discretionary expenses $712.00
Surplus after all expenses $398.00

 

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Pedro Marques
PHC-BR International
Skype: chagas-es

Click here to work with me personally.

Check our website: http://www.phcbrinternational.com
Watch our blog: http://www.businessexpertsonline.net
Like our page: https://www.facebook.com/PHC.BR.International
Follow us: https://twitter.com/PHC_BR

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"If something is going to affect your life, it's best to know as much as you can about it." - Donald J. Trump
 

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