Use A Budget Calculator To Simplify Your Budget
For years before computers became household staples, people tracked their household expenses using a meticulous plan that involved a detailed budget, spreadsheets and physical checkbooks. Thanks to technology, most people forgo tracking their expenses because online banking makes it easy to see in real-time where your money goes each month. Budgeting has become a lost art, yet it remains as an important part of living a debt-free life. If you’re wondering how to get on track with your finances, check out the following tips on how to use a budget calculator to simplify the process.
The Simplicity Of A Calculator
Budget calculators are designed for the meticulous accountant in everyone. Laid out like a detailed spreadsheet, they offer users the ability to import monthly income and expenses down to the penny. The calculator then lets you know how your money is being spent and what you can do to make the most of your funds. If the process sounds simple, that’s because it is. However, the real trick comes in using the calculator to its actual ability and sticking with the budget it creates.
Understanding Cash Flow
Entering your income and expenses into the calculator is easy, but do you know how to analyze the information? To understand the impact of income and expenses, you need to really see how your money gets distributed. It’s not enough to write down a ballpark estimate based on an average. Instead, figure out what you actually make each month and use this number. Any extra income can be allotted separately into a column for bonuses.
Basic, Unchanging Expenses
Basic expenses like utilities, food, mortgage payments and clothing will probably vary little from month to month. A budgeting calculator can be used effectively by plotting those routine, unchangeable expenses. Don’t forget things like monthly subscription fees, toiletries and bi-monthly bills. People often forget to plan for these items because they don’t have to pay for them as regularly as they do other bills and expenses.
Irregular Costs And Purchases
What do you do about irregular expenses such as haircuts, visits to the doctor, birthday gifts and vacations? Use the budget calculator to plan for them. These tools were designed to help people assign a place for every dollar they make. There should be no dollar left unspent at the end of the month or pay period because every cent you earn should have a place in your budget. Using a calculator for regular expenses will show you how much you have leftover for irregular purchases.
Tracking The Trends
A budget calculator gives you the ability to manually track your spending habits over time. Eventually, you’ll discover patterns in the way you actually spend money versus the way you thought you spent money. You may find that you spend too much on your daily coffee break or that you could shift some money into an interest-yielding savings account. More than a simple budgeting tool, calculators allow you to stay ahead of the game when it comes to your personal finances.