Troubled Tom sits down at his computer to use the personal home budget
program. He has a good job, a nice girlfriend, a super apartment,
hot car; everything seems great except his credit card balances keep
increasing and he can’t seem to figure out why. Tom starts by
bringing out his most recent banking statement and credit card statements
that encompass the same period as the bank statement. My favorite
way to approach this budget process, (since those of you reading this
get the advantage of reading this tutorial,) will be to stop and sit
back a moment. Answer the question about projected expenses. Don’t
open your statements or mark anything down yet; this relates more
to attaining a personal understanding of what the true picture of
your financial life may be at the end of the personal budget analysis
process and how this true picture may differ from your original ideas
about the budget.
Tom thinks about his financial life and budget. He
figures he spends about $2500 each month and that he should be saving
$500. Tom enters $2500 into the 4th lines down, projected expenses,
and also writes the number down on a piece of paper to remind him
later of what he thought. Tom makes $3000 per month at his job, he
pays $1100 per month on his apartment, car payment $700, $50 utilities,
almost that much again on other stuff (that would make $650 for all other budget expenses), he thinks he has a good feel
for what he spends.
Now let’s follow with Tom through the
program. Start with the check book. Look at the dates for the statement
you are using. Those are the dates you will use for all analysis, the timing does not matter
but be consistent and create the budget in the worksheet using the exact same 30 or 31 day period for all personal accounts. If you have more than one bank account pick one set
of dates and use the same dates, that may result in needing to use
two statements from other accounts to get the range of dates and require
some estimating, just do the best you can. To better understand how to use the budget
program, have another window or tab with the personal home budget
page open and enter the numbers as the tutorial instructs and make the same entries as Tom does in the tutorial:
