??????  Let’s be honest, nobody likes to do it, and it takes a lot of self discipline and commitment, but, in order to become financially independent and successful in real estate,  you will have to learn to BUDGET.

  1. Record all of your sources of income. If you are self-employed or have any outside sources of income be sure to record these as well. If your income is in the form of a regular pay cheque where taxes are automatically deducted then using the net income, or take home pay, amount is fine. Record this total income as a monthly amount.
  2. Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, car insurance, groceries, utilities, entertainment, dry cleaning, health insurance, retirement and everything else you spend money on.     DO NOT FORGET THOSE YEARLY EXPENSES, SUCH AS REGO, SCHOOL FEES, CHRISTMAS…. YOU WILL HAVE TO BREAK THEIR COST DOWN INTO A MONTHLY AMOUNT THAT YOU CAN PUT ASIDE IN A SAVING ACCOUNT.
  3. Break expenses into two categories: fixed and variable. Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. They included expenses such as your mortgage or rent, car payments, electricity cable and/or Internet service, gas , credit card payments and so on. These expenses for the most part are essential yet not likely to change in the budget. Variable expenses are the type that will change from month to month and include items such as groceries, petrol, entertainment, eating out , presents……
  4. Total your monthly income and monthly expenses. If your end result shows more income than expenses you are off to a good start. This means you can prioritize this excess to areas of your budget such as retirement savings or paying more on credit cards to eliminate that debt faster. If you are showing a higher expense column than income it means some changes will have to be made.
  5. Make adjustments to expenses. If you have accurately identified and listed all of your expenses the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense.If you are in a situation where expenses are higher than income you should look at your variable expenses to find areas to cut. Since these expenses are typically essential it should be easy to shave a few dollars in a few areas to bring you closer to your income.
  6. Review and update  your budget all the time . It is important to review your budget on a regular basis to make sure you are staying on track.
  7. BE REALISTIC. This may be my most important advice. Do not plan to have some magical extra money coming in or some fixed expenses vanishing . That does not happen. Every bit of money coming in should have a goal, a purpose and shall not be spend without thinking first “Am I on top of my budget?”

money smart logo Manage Your Money by ASIC is a BRILLIANT publication click here to download your copy today & START your new budget PDF – managingyourmoney

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