Whether you are a multi-million dollar player or an athlete at minor levels being aware aboutwhat you are spending on a monthly basis is most useful.The best and the simplest solution to remain financially stable is to create a budget and monitor it at regular intervals.
Here are the steps to creating a personal budget:
- Gather your financial statements.This includes bank statements, investment accounts, monthly bills and any information regarding a source of (monthly) income or expense.
- Record all of your sources of income.This should include all your income. Using the net income is fine if your taxes are automatically deducted. It is better to underestimate than overestimate when listing sources of income.
- Create a list of monthly expenses. Track and write down all expenses you incur over the course of a month. Include everything that you spend money on and don’t forget about variable expenses (for example, expenses that fall once a year). Again, it is better to overestimate than underestimate.
- Total your monthly income and monthly expenses. If the result shows more income than expenses, you are off to a good start. If not, you will have to make adjustments as your current lifestyle is not sustainable in the long-term.
- Adjust and review. It is important to monitor your budget over time as you might find expenses that you can cut down on or experience an increase in income.
Note: Download worksheet example to make your own budget.