THIS IS HOW YOU DO YOUR 2010 BUDGET!
For years we have spoken about budgets. And even now many people are acutely aware that they don’t seem to work. However from a futuristic point of view, without drawing your budget, you have no way of knowing how much money you are going to need in the following financial year.
So perhaps you should change your idea of a budget as a document that seeks to restrict your life, and start thinking of a budget as a document that can help you to make more money and lead you to freedom.
I of course don’t have enough space in this column to divulge all issues of drawing a budget, so it’s a start. To take it further I will unabashedly recommend my book, Functional Mastery Over My finances, available in all bookshops now.
The first step to drawing your annual budget is to go month by month, starting in January considering all items in your life that are non-negotiables. Write down on a piece of paper, all items or things you will have to spend money on whether you like it or not. Your mortgage or rent; school fees times number of terms times number of kids. All your contracts; i.e. policies, loan repayments; car repayments; higher purchase contracts.
Now write down your variables – averages of groceries; fuel or transport; telephones – all of them; clothing, etc. Consider all special events of 2010 that will affect your life: birthdays; weddings; holidays like valentines, Easter; independence holidays; the world cup, etc.
Now add up all the amounts. This is the amount you are going to need just to live normal life next year. No, don’t look at your pay slip yet! Now, make a list of all things you would like to do to improve your life in 2010. These are things that if you do them, you will consider yourself to have grown. Estimate what these will cost you and add them to your survival list.
Now add your dream list. These are things that will allow your mind to go to places it’s never before gone. People, places, things, times and events you’d like to experience. Estimate the costs and add them up.
Now add up all the lists. I know the amount exceeds your income and it probably should!
Now consider all your incomes – everyone’s income that contributes to your life. (They need to be involved in this process by the way, if possible). Now match your currently expected income with your survival expenditures and see if it matches.
Now that you have things on your budget for which you have no money, the next list are all possible ways in which you can make extra money. This is the part of our brain most of us don’t exercise. Worrying about absence of money doesn’t bring money. Brainstorm –let there be a storm in your brain. There is a chapter in my book called ‘The Money Tree’ which I think you should read. We’ll take this further.
In the meantime – have a merry Christ en Mass to all, AND let 2010 truly be a year of prosperity! For Real!