Budgeting Advice from Professional Budgeters

Budgeting advice from accountants and tax planners can be useful when they are applied to your personal finances. The same principles used by large corporations to remain financially stable holds true for even a single individual. Budget every expense, maintain a balance of assets to debt and think long term.

Budget Expenses

Start by listing each of your fixed expenses on a monthly or yearly basis. This does not include groceries or even utilities, because these costs can be reduced if necessary. Start with the very basics, including debt payments, and work your way from there, ultimately even budgeting cash expenses on coffee or other small items.

Balance Assets and Debts

You should maintain assets in at least a 2:1 ratio to your debts. This will protect you from bankruptcy if you lose your job or suffer other emergencies. You can sell the assets, pay off your debts and still have a livable amount of assets. A 5:1 ratio or greater is advisable for a person in an unstable financial situation.

Think Long Term

Budgeting is not just about getting through the month. You have to have long term goals in order to realize true success with budgeting. Set three and five year goals, similar to a business, in order to see the rewards to your budgeting.

blog comments powered by Disqus