The budget is the most basic thing in
financial planning. It is therefore especially important to be
careful when compiling the budget. To start you have to draw up
your own budget for the next month and only after it you may
make a yearly budget.
As the basis takes your monthly
income, subtract from it such regular expenses as the cost of
housing, transportation, and then select 20-30% on savings or
mortgage loan payment.
The rest can be spent on living:
restaurants, entertainment, etc. If you are afraid of spending
too much, limit yourself in weekly expenses by having a certain
amount of ready cash.
"When people borrow, they think
that they should return it as soon as possible," said Sofia
Bera, a certified financial planner and founder of Gen Y
Planning company. And at its repayment spend all that earn. But
it's not quite rationally ".
If you don't have money on a
rainy day, in case of an emergency (e.g. emergency of car
repairs) you have to pay by credit card or get into new debts.
Keep on account of at least $1000 in case of unexpected
expenses. And gradually increase the "airbag" to an
amount equal to your income for up to three-six months.
"Usually when people plan to
invest, they only think about profit and they don't think
that loss's possible", says Harold Evensky, the
President of the financial management company Evensky &
Katz. He said that sometimes people do not do basic mathematical
calculations.
For example, forgetting that if in
one year they lost 50%, and the following year they received 50%
of the profits, they did not return to the starting point, and
lost 25% savings. Therefore, think about the consequences. Get
ready to any options. And of course, it would be wiser to invest
in several different investment objects.
