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					                  PLANNING INCOME AND EXPENSE
                                 EVERY MONTH

In my previous article, I said that there are several things to help your finance
every month :

   1.   Plan your income and expense every month
   2.   Do the plan strictly
   3.   Have reserves fund
   4.   Take some insurances

This article will discuss point 1 and 2.

   1. Plan your income and expense every month

        Starting right now, plan when you will get your salary, how much its
        amount, and when you will spend your money, what the posts and how
        much the amount of expenses. The plan called Budget.

        In example, you will receive this much on your salary on 27th, then from
        that amount you will use this much for this expense, that amount for that
        expense, and so on. So, if you make a budget first, you will detect on
        the first place whether there will be deficit or not in the middle of the
        month. If yes, you can revise the budget to avoid deficit.

        Composing budget is very easy. If you have already known the amount
        of average income and expense every month, you could also predict
        how much income and expense for the next coming months.

        Budget function

        Many people feels uncomfortable to draw up and have budget. They
        think budget is the same with restrain their shopping desire.

        NO. The function of a budget is to inform if your expense surpass your
        income or not. If yes, you ocan revise the budget so deficit can be
   But, if you do not have budget, you will be difficult to know if your family
   expense has surpassed the income. So, if there is deficit at the end of
   the month, you just realize it at that time, after all has happened.


   Include saving in your budget. Usually people save their money later,
   after their money was spent. So, sometimes they cannot save their
   money because all of their money was spent for shopping.

   Thereby, it would be better if saving is not included later but earlier.
   Therefore, when you draw up a budget, insert saving as one of the
   posts that you must do earlier, at least after you repay your loan.

2. Do the plan strictly.

   A plan is useless if it is not done. In here, plan of income and expense
   as much as Rp250,000, if you strictly obey and want to do according the
   budget, at the end of the month the discrepancy between income and
   expense of your family will be certainly figured out, namely Rp250,000.

   Thereby, it would be easier to make another plan froward, because you
   have already known that every end of the month you surely have
   discrepancy of Rp250,000, which can be used for another purpose.

   However, sometimes people, although have already made up a simple
   budget, is still unable to meet their budget. If he, i.e. allocated
   Rp500,000 per month for shopping, the figure could expand to

   This can be prevented with a harder system, namely 'envelope system'.
   If you have already drawn up a budget, you should allocate the amount
   right away according to each post. Each post is represented by one
   envelope. If the money in the envelope is empty, you don't have to try
   opening the other envelopes, because you have already known that
   budget for the related post has touched its limit. Envelope system is a
   little complicated, but perhaps it is the sacrifice that you should doso
   that you will not experience deficit. The most important, your expense
   now is more controllable.

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Tags: money, income