Noting down daily expenditure and monthly review

MONEYMONK WEEKLY MESSAGE 12/2019

Recording your daily expenditures and monthly review

The Budget is only a plan  to help you to execute savings and expenditure. It will need revision based on some data. How to generate this data? To derive full benefit from budgeting  you will need to make it a habit to record your daily expenditures. The technology available today can facilitate this.

Having made the record of all expenditures on a daily basis it will be easy to summarize it at the end of every month.

The next step is to review this and analyze it by comparing it with the budget you made and make course corrections to revise the budget.

It is very important to adjust your behavioral aspects as regards to the expenditures you make. Questions to ask yourself are ..... Are there expenditures which could have been avoided ? Were these impulsive and not well thought over?

You need to analyze and ensure that your planned savings are not reduced as a result of overspending. Also effort should be made to increase your savings to keep up your ‘savings rate’ as your income increases. (‘savings rate’ and ‘ just some random increase in savings’ are two different things. Please wait for the next  message when I clarify these terms ).

www.moneymonk.me

Note:

Earlier messages are posted on my blog https://moneymonk-joe.blogspot.com/

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If you or any of the people you know want to receive this weekly message they need to send a request mail to learnfrommoneymonk@gmail.com

Budget

MONEYMONK WEEKLY MESSAGE 11/20

Budget

Many are fearful of the word ‘budget’ and think of it as something very complex and difficult to understand.

To understand it in the context of ‘Personal Financial Management’ is easy and is also very useful.

Firstly make two columns.
In the first column write down your monthly income all deductions not in the nature of savings. (e.g. taxes .) This figure is then your real income. This will be your start point for the second column.

Now in the second column write down first the savings component as you must focus on this (for e.g. provident fund cuts and also the amount you plan to save regularly every month )

Subtracting this savings total from your income in hand will give you the amount you have available for planning your monthly expenditures as well as making provisions for some bi monthly, quarterly or annual expenditures.

Your budget is now ready and the format will look something like this......

Note:

Earlier messages are posted on my blog https://moneymonk-joe.blogspot.com/

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If you or any of the people you know want to receive this weekly message they need to send a request mail to learnfrommoneymonk@gmail.com

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Provident Funds

MONEYMONK WEEKLY MESSAGE 10/2019

Provident Funds

Provident funds are meant to be savings for the retired life by contributing from  earnings while in  working life. In some jobs the employer also contributes to it as per rules along with the employee. Self employed and others who do not have such funds have public provident funds (PPF)option. Those having contributory provident funds can also open PPF accounts in addition. All salaried employees must at least contribute enough to take full advantage of employer contribution if not more.

Armed forces personnel retire early and have to close their provident fund accounts on retirement. They can use PPF account to overcome this premature forced closure 

Normal contributions on retirement  are often found to be inadequate for a happy retired life. Causes are many. Those who do not have such schemes or are self employed must try and contribute at least 5% of their salary/ income  in PPF if not more. Such contributions must start  as early as possible. 

 Good part of these funds is that they are a little difficult to withdraw and have compounding effect benefits, I shall discuss this amazing compounding effect later.

Temptation to withdraw from these funds must be avoided . Any emergency  withdrawals from provident funds must  not affect your post retirement needs.

www.moneymonk.me

Note:

Earlier messages are posted on my blog https://moneymonk-joe.blogspot.com/

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If you or any of the people you know want to receive this weekly message they need to send a request mail to learnfrommoneymonk@gmail.com

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EMERGENCY FUND

MONEYMONK WEEKLY MESSAGE 9/2019

Emergency Fund
Life is not always fair and has its ups and downs too. Yet it is worth making the most of it and being happy. To achieve Financial Freedom it is essential to have regular savings to invest. 

Emergencies often tend to disrupt and make the savings irregular.

To over come such emergencies it is essential to first create an emergency fund equal to about six months of your monthly budgeted expenditure and keep it easily accessible. Don’t be tempted to use it unless its a real emergency. If it gets used for a real emergency, recreate it as soon as possible.

For your information, IDFC First bank gives 6% interest on a fully liquid savings bank account with a balance of over one lakh and 7 % for a balance of over two lakhs. 

                                             www.moneymonk.me

Earlier weekly messages are on my blog http://moneymonk-joe.blogspot.com/

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If you or any of the people you know want to receive this weekly message they need to send a request mail to learnfrommoneymonk@gmail.com