With a new year and a fresh start, it’s important to create a budget for yourself in order to tackle the new year head on. We recommend that our team starts by applying the idea of a breakeven analysis to their personal life. By understanding how much you need to be making per week and per month to cover all of your expenses, you can better plan for how much money can be spent on leisure and avoid feeling strapped for cash in 2014.
We attached the worksheet we use below and also a link to ING’s income needs calculator. Both resources are a great way to take control of your finances and start saving for your future!
Personal Break Even
It is very important to get a good grasp of your personal finances. To survive the “tough times” you must be good at saving money. Most people under-estimate how much the spend. The average American Spends 101% of their earnings.
Household Expenses (utilities/gas/cable):___________
Car (payments or lease):__________
Gas, Insurance, and Repairs (for car):__________
Phone (home and cell):___________
Groceries (food, make-up, toiletries):__________
Entertainment (eating out, movies, bars, nightlife):____________
Miscellaneous and incidentals (things you usually don’t budget):____________
(It is important to look at “savings” as an expense. Budget it in to your monthly expenses. It’ll come in handy for rainy days or future investments.)
Payments (outstanding credit card debts or student loans):__________
Total Monthly Expenses:________________
How much money do I need to earn to pay all my expenses?
Formula: (total expenses) divided by 0.75 (assume 25% comes off for tax) = monthly revenue needed
Monthly Revenue Needed=_______________________
Weekly Revenue Needed= _______________________