The Guide to Creating a working Budget
Maybe you’ve tried a budget in the past. And maybe you’ve wondered why it never seems to work out as well as it does on paper. The answer is simple: we don’t account for the little expenses we have every month, such as that trip to Starbucks, or that gift we had to get our niece or nephew. Taken together, you spend much more than you expect you will at the start of the month!
When budgets work, they help us accurately manage our finances. They help us identify whether or not we’re making more than we spend. And because we have a bird’s eye view of every expense, we can better optimize our income, prioritize our money, and put savings away for a time when we really need it.
We want to help you get to the point where you are in total control of your money. That’s why we created the UAE Money Expert Technique, as a way to accurately assess how much you spend per month.
What is the UAE Money Expert Technique?
Simply put, it’s an alternative to standard budgeting techniques that never seem to give us a complete understanding of where we’re spending our money. These budgets look at a typical month, accounting for bills, rough food spending estimates, and a few additional purchases that we remember to add in. But no matter how accurate you think you’re being, you never catch everything.
How does it work?
You’ll need about an hour to complete the entire budget, as well as your last three months of credit card statements. Lastly, you’ll require our budget calculator.
Take colored highlighters and start organizing your expenses. Food should have one color, certain bills should have another, debt should have one, and even outings to local restaurants should be highlighted. Once it’s all organized, divide that number by 3 and you’ll have your average monthly expenditure for that item.
If you don’t have a credit card, you’ll need receipts of everything, along with bill stubs and anything else you have.
So you have now completed the BUDGET CALCULATOR
Understanding the results
Once you’ve finished using the calculator, you’ll have a very good idea of whether or not you’re spending more than you’re making, and if you are saving something, you’ll know how much that number really is.
If you’re spending LESS than you make:
Congratulations! This means you’re ahead of the curb. You can start a savings plan, and at the same time find areas where you can cut back—thus saving you even more.
If you’re spending MORE than you make:
Don’t worry quite yet! You haven’t even looked at ways that you can cut back on your expenses. You may not even notice some of these cuts, so just because you have to lower your expenses, doesn’t mean you’ll be going on a starvation diet.
You may already be borrowing money to keep your spending habits where they are. This is a moment of introspection then, when you really need to assess how long you’re willing to go straddled with that kind of ever-increasing debt.
If you think it’s time to make a change, then don’t hesitate to contact the UAE Money Expert. Our specialists are masters at decreasing debt and lowering expenditures. We’d be happy to speak with you!