If an income estimate ends up being high it can be a precursor to financial ruin. For this reason your real take home income is the best number to use. If your income varies then using a smaller number you can count on is best, bonuses and other extras that are not consistent should also be excluded.
A budget short fall is how our finances fall into ruin however if you end up with extra money in your account no damage is done and with all your expenses taken care of this money is free to make a direct impact on your lifestyle or net worth.
Again I like to collect these numbers on a spreadsheet as it makes it easier to work with, however having an organized list is what is key.
With the list, you can now total your income and current spending. How do these numbers look. Healthy spending should have more money going into your account every month than coming out (and borrowed money can not be used as part of your income to make this work).
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