My thoughts on budgeting, income and expenses
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I am penning down my current way of doing family budgeting, so as to compare how differently it would evolve 10 years from now.
I personally like to stick to two very basic general pointers: income and expenses.
1) Income can come from many sources, be it my work, rentals(optional), room rentals(optional), total fix dividend payout from stocks, fix deposits, bonds and interest from savings. I also include my spouse income and other more variable sources of income like year end bonuses(if it is guaranteed). Once finalized, I would try to get an accurate number of an average net income(after taxes) per month.
2) I categorize expenses into two groups.
First group of expenses are the predictable ones which rarely change, like insurance, utilities, levies, housing loans etc.
Second group of expenses like, food, transport, clothing are more variable and so I try to put a close estimated value to each of them. I put large, infrequent expenses like house repairs, car, computers etc in this group too.
3) Once I am done with that, I compare them and make sure they are at least equalized. If my expenses are more than my income, I would take action to stream line my second group of expenses.
I try to strife for a comfortable 10% or more income surplus to my expenses so that I can put that extra into savings. Once the amount of savings is deemed enough for another potential income vehicle, I would compound it back, in hopes of increasing my income.
Of course, both pointers cannot be put to the extreme, as my main goal ultimately is to have a comfortable life with my loved ones. Find the "Goldilocks zone" that is right for you.