Good Personal Finance Budgeting

One of the things that we are not taught to do as children is how to balance the checkbook and manage our money effectively which unfortunately impedes our ability to most effectively use our resources without going into debt. In fact, the idea that we have finite resources and must make choices is at the heart of economic theory. This is also the core idea in personal finance budgeting: making choices when there is only a finite amount of money.

The process begins with surveying each of our personal financial landscape. This can be accomplished by looking through the last few months of credit card transactions as well as a list of bank transactions. Each transaction should be categorized in some way. An example of this is the category of food, where one might put costs related to groceries, as well as eating at the company cafeteria. Other categories include entertainment, utilities, and clothing.

After categorizing each kind of cost, it becomes easier to decide how to eliminate things. Some things cannot be eliminated, which make them basic or fixed costs, such as rent. Some things cannot be eliminated, but can be adjusted or substituted, making them variable costs. For example, watching a movie in the theater once a movie can be effectively substituted by renting from Red Box for much cheaper. And finally, some costs can be removed entirely.

In the following, we list out some types of transactions and costs and how to manage them.

The calling plan on a cell phone is not a fixed cost. In case you own an outdated phone plan, it may be costing you more than you need to pay. You can compare your cellular phone plan with others that might be suggested to you by identifying a good personal budgeting online place, entering your mobile phone plan info, then seeking comparisons. A comprehensive site offers a list of phone plans that are suggested in your city and will work with what you need.

Buying home appliances is a variable cost. In the event that you buy a sizable appliance, it may drain your budget when you buy it, then continue to drain your budget when you run it. Often, consumer website tell that a consumer check the energy star rating of an appliance and determine how much power it requires before purchasing it. A smart consumer can save a good deal of money on energy throughout the year.

Health insurance is a fixed cost, but can be controlled. Your job may help you to get lower insurance rates – if you are in a low-risk (safe) position, your insurance may cost you less. Some fairly “safe” jobs are teaching and accounting so if you own this sort of job, you may be able to get lower costs on your health insurance.

Come to our site on transaction check register to find out the most latest ideas. Extra resources provided for fee only financial help can be found here.

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