Budget Creation & Management
Although creating a household budget may seem easy, you may be like so many investors who hate sitting down and putting pen to paper. Probably, the only thing more difficult then creating a budget, is to then stick to the budget. But most financial advisors will tell you that grabbing control over what you are spending is essential to your financial health. It is so essential that we put it at the top of our list of "things to do" when we first meet with a prospective client. Have you done your budget?
Well if you haven't, we can help. Budgets can come in all shape and sizes. There are online budget programs, budget apps, books on budgeting and, of course, the old fashion back of the napkin budget. Anyway you slice it, budgeting is simply listing your expenses over some period of time (ie. weekly, monthly, quarterly, annual). In addition to listing your expenses, you should list your sources of income as well to create a full income and expense ledger.
When you start your budget, you'll remember that some of your expenses are monthly, some are quarterly and some are bi-annual or annual. If you are using a piece of paper or excel, you can create 12 columns, one for each month, and then start listing expense rows. You can divide expenses into fixed and variable. You can also group expenses – put all housing expenses (ie. mortgage, real estate taxes, landscaping, etc.) or all insurance expenses (ie. property, life, car, disability, long-term care, etc.). We like to be as detailed as possible and accordingly itemize all expenses.
Of course, once you have completed your budget, now comes the hard part – managing your budget. It takes a lot of discipline to stick to your budget. We help a lot of clients with this process. Sometimes, if you are retired it may be helpful to transfer a set monthly amount from your savings – no more, no less – and limit your expenditures to that monthly amount. If you are still working, it may be helpful to make sure you are savings a certain amount and transfer it to your savings account and use the balance for your cash outflow. Remember, cheating on your budget is only cheating yourself and you will pay for it (literally) down the road.
A crucial aspect of financial planning, budget creation and management helps you identify and prioritize your expense. Our team of qualified and highly skilled New York financial planners can help you implement a financial plan that is very specific to your cash flow needs, family circumstances, and financial and tax situations.
Serving Nassau County and Suffolk County clients with offices in Melville, Long Island and Manhattan, New York City. Contact us today.
Have more questions about our customized and reliable financial planning services? Please do not hesitate to request a complimentary consultation