Clark & Washington

Creating a Budget You Can Abide By

Planning out your expected expenditures for the next year is essential for successfully managing your finances. By crafting a budget that is realistic, you can increase your ability to get loans and other funding, minimize the risk of personal bankruptcy and create a good estimation of your expected net income for the next year.

Budgeting Tips

1. Count Your Income and Budget from the Previous Year

The first step in planning any sort of budget is to figure out how much you spent and earned in the previous year. Did you break even with your income? Was your budget large enough, or did you end up overspending?

In this case, it is helpful to go through month by month and tally up your total gross income for that month. In addition, it is important to research upcoming market trends. If there’s a chance the price of living might go up during the next year, you definitely have to account for that when planning a budget.

2. Add up Your Fixed Costs and Personal Expenses

Now that you have a general idea of your previous budget, consider your monthly expenditures, such as rent for your apartment, cost of groceries, and car payments. These fixed costs should be easy to calculate, because they do not change month to month.

Next, you will have to determine variable cost items and unplanned expenses. Because there’s no real way to know how much you will spend on personal expenses, it’s a good idea to allot a certain amount of money for surprise costs throughout the year.

3. Adjust Figures to Create a Sensible Plan

After you have a general idea of how much money you will spend, put everything together. If you’ve found that your estimated budget is over what you will bring in next year, look for places where you can cut down on costs. Remember to be flexible, as your budget doesn’t have to be permanently fixed. Rather, it should simply be a helpful planning tool to make sure you have your finances under control.

By following these budget tips, you can keep your personal finances healthy and profitable. However, if this advice comes too late and you’re now facing bankruptcy, don’t hesitate to contact our Atlanta bankruptcy attorneys at Clark & Washington for your legal needs. We have decades of experience helping individuals navigate the tricky avenues of surmounting debt.


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