The Necessary Life Skill of Budgeting
Income, savings, and other assets can be used to access value of financial worth. Take home pay after social security, federal, state, and local taxes, along with any temporary or seasonal income could be used to determine income for budgetary purposes. Liquid assets are assets that can be turned into cash if needed. Liquid assets, such as money in savings, money market, Christmas club, or certificate of deposit accounts could be cashed out easily. Assets that are harder to turn into cash are considered “other assets”. Stocks, bonds, retirement funds, real estate, jewelry, antiques, furniture, appliances, and vehicles can be included in the other category. Vehicles, such as cars, trucks, boats, planes, etc. can also be included in this category. Think of other items that possess a monetary value that you own. Add these items to your list. Add the value of all items on your compounded list. This list will represent your financial worth.
Now that you know your financial worth, it is time to set goals. Just as career goals, financial goals can be set in short and long terms. It is a great idea to plan for the future. Many people live well beyond their working years. Saving money can be a difficult task if the mindset is not present. For instance, fast food restaurants are very popular in the United States. Costs can add up very quickly. One person may spend $5 per meal on a daily basis. This may appear to be harmless to the budget, but $15 per day would turn into $450 per month. How many other ways could you use $5400?
Budgeting is needed to plan for today, as well as the future. Financial worth is the beginning of planning for the future. Small purchases can add up very quickly. Short and long term goals can be used to keep budgeting in perspective.
Article By Celestine A. Gatley
Celestine Gatley´s Designed Transformation Blog
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