VIEWS: 18 PAGES: 1 CATEGORY: Personal Finance POSTED ON: 9/13/2012
Expenses are a part of everyone’s lives and it is something that we neglect most of the time. Managing ones expenses can be very helpful especially if you are having trouble balancing things out and if you have tons of debt. Thus, it is very important to calculate your expenses to keep track of it. Go through the article and follow the guide on how to calculate future expenses.
How To Calculate Your Future Expenses? Expenses are a part of everyone’s lives and it is something that we neglect most of the time. Managing ones expenses can be very helpful especially if you are having trouble balancing things out and if you have tons of debt. That is why it is very important to calculate your expenses to keep track of it regularly and to keep everything in order. If you want to get started on monitoring and calculating your expenses, here’s how you should do it. You first have to calculate your current expenses in order to compute for your future expenses: To get started, make sure you have a list of all your expenses within a month. Include in your list your rent, grocery budget, utilities, entertainment expenses, everyday allowance etc. then add everything up. No matter how small it may be, make sure you add it in your list to be able to compute everything well. If you’re done listing it down, you can now move on to your monthly income (you can also add other sources of income) then subtract your expenses to this. If you get a negative number then you might to adjust some of your expenses but if there is still something left for you then you’re good. If you already have a computation of your current expenses, you might want to gauge what your future lifestyle will be. It is expected that all the expenses in the future will be rising so it might be best to compute the average inflation rate which is around 5% for the past 10 years. let’s say you want to figure out your expense for the next 5 years, So for example your current monthly expense is P 20,000 a month… Future value = Current value (1 + i)n Future value = 20, 000 (1 + .05)5 Future value = 25, 525.00 This means that you should be preparing at least 25k for the next 3 years for your monthly expenses. Always put in consideration some of your credit debts as well (this will ensure that your credit score and credit report free are in good shape), pay for them regularly. Also, you have to allot an emergency fund for yourself, so if you really want to secure your future, you have to start saving early. Calculating your expenses early on will help you avoid getting buried in debt. This will help you anticipate what you’re going to need in future and there’ll be fewer problems to deal with. So calculate your expenses now and stop worrying about having an unsecured financial future. Don’t know how to save maximum money on taxes? Follow the best money saving tips on taxes & keep a track on your credit scores for easy management of your finances.
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