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Most people who do plan, forget to review it regularly. If your financial position changes (e.g. you lose your job or get a higher paying job), you need to adjust your plan.
What are your top three financial goals right now and how much does each one cost?
1. _______________________________________________/$_______________________
2. _______________________________________________/$_______________________
3. _______________________________________________/$_______________________
Here is an example of a budget plan:
| Item | Available Monthly Income (excl savings) | Cost of Item | How many months until purchase can be made? | How much per month needs to be saved per month |
|---|---|---|---|---|
| Cell Phone | $720 | $1,000 | 3 | $334 |
| Car | $386 | $2,000 | 12 | $167 |
| Prom Tux | $219 | $200 | 1 | $200 |
| Computer | $19 | $500 | 6 | $84 |
| Balance | -$65 |
Based on part-time job, working 20 hours a week at $15/hr pay and 28% taken out for taxes (net paycheck is $216/weekly).
As you can see by this example, there is a shortage of $65 a month. This would need to be overcome by adjusting some of the budget items, their time to purchase, and/or the amount of the cost.
Maybe this would be more realistic for a budget plan:
| Item | Available Monthly Income (excl savings) | Cost of Item | How many months until purchase can be made? | How much per month needs to be saved per month |
|---|---|---|---|---|
| Cell Phone | $720 | $1,000 | 6 | $167/td> |
| Car | $553 | $2,000 | 12 | $167 |
| Prom Tux | $386 | $200 | 1 | $200 |
| Computer | $186 | $500 | 6 | $84 |
| Balance | $102 |
By adjusting the time needed to save for the cell phone from 3 months to 6 months, freed up the necessary income to make the goal for the computer realistic. Especially if you already have a phone, it may not be necessary to purchase one in 3 months and 6 months would be just fine. The bonus in this plan is there is a $102 remaining balance each month. This balance ($102) can be used for going out to eat with friends, investing into a stock, mutual fund, or bond, etc. All you had to do was wait an extra 3 months for the purchase of something that was not necessarily needed.
