ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to manage and create a financial plan . Living well on a fixed budget.

Updated on October 9, 2015
Tame your financial dragon by creating a budget.
Tame your financial dragon by creating a budget. | Source

How to Create a Budget

Understanding how to budget is a skill that can mean the difference between living well or living in constant stress. Whilst budgetting may not sound fun the result of living within a budget can lead to fun. Whether you live on a fixed tiny income or have a high income it has been proven time over time that we tend to live to the maximum of our income. In this budget - or financial plan - I have included paying yourself in the top line and aiming to save for both pleasure and emergency situations..

Use the following financial planning budget sheets for income and expenditure to get a realistic picture of your income and expenses. Make adjustments within the expense lines so that you have money for pleasure and savings. That may mean giving up unnecessary or spur of the moment spending. By creating a budget you will benefit from knowing exactly how much money you have and not having additional stress about special ocassions such as Christmas or birthdays, or if something happens that means you earn no income for a three month period of time.

Budgetting is like creating roots that grow deept into the ground and make healthy growth
Budgetting is like creating roots that grow deept into the ground and make healthy growth

Financial Plan - Budget Sheet Income

Monthly Family Income (net) (Use all that apply)

Employment Income

Pension

Child Support

Benefits

Self Employment

Rental

Child Tax or Child Benefits

Misc Net income

TOTAL: $

Source

Financial Plan - Budget Sheet Expenses

Self (10% of net income) This is your discretionary spending total for the month

Savings - 5% of net income. This money is untouchable

HOUSING Expenses

Rent/Mortgage

Property taxes/strata fees

Heating/Gas/Oil Fines/Penalties

Telephone

Other

Cell

Cable

Hydro/electrical use

Water

Living Expenses

Food

Toiletries

Clothing

Furniture Grooming

Other

Transportation

Car lease/payments

Repairs/Maintenance

Gas/Petrol

Public bus Tickets/Bus Pass

Rail Travel/Rail Pass

Personal Expenses (Discretionary)

Charitable donations

Smoking/alcohol

Social events

Entertainment/sports/recreation

Allowances

Other

Medical Expenses

Treatments e.g. chiropractic/massage

Dental

Other

Non Discretionary Expenses

Child/spousal support

Fines/legal/penalties

Insurance

Housing

Contents

Car

Life

Other

TOTAL $



Source

Managing Financial Problems

Facing the problem

If after competing the budget you recognize you are unable to meet your financial obligations or if you are drowning in debt, no matter how that happened, the most important first step is to face the problem head on.

In these uncertain financial times people across all socio-economic groups are facing a financial challenge. It doesn't matter if the debt is $100, $1000 or $1000,000 dollars - debt is debt and the stress and threat to health that goes with it is considerable.

Understanding that this problem is not unique to you and your circumstances is important. Reaching out for help that will assist you to change the current situation is essential.

I am writing this as one who has been there - job loss and health issues created serious financial hardship - but the real problem was burying my head in the sand and not changing my relationship with money.

The first Step

Assess whether the current debts that you have are caused by one or more of the following:

  • Unable to pay the minimum on credit card statement(s)
  • Using credit card for items that used to be paid for in cash or with debit (groceries/incidentals)
  • You are over/at or close to all credit limits
  • If you lost your job today, you'd be in immediate financial trouble
  • You have no clue about the size of your total debt or monthly expenses
  • You're arguing with your partner at home about money
  • Your bank overdraft always needs an overdraft
  • You've consolidated your debts more than once
  • You're receiving harassing phone calls from creditors
  • Stalling one creditor to pay another
  • No money before pay day
  • No savings
  • Charging more per month than paying on account
  • Requesting credit limit increases
  • Making unplanned major purchases.

Highlight as many contributing factors on the list that have led to the current debt problems. Add more if you have different ones.

Breathe. You have taken the first step. You may be feeling overwhelmed and feel like blaming yourself or others. STOP. In order to change our relationship with money it is important to practice our practical and cognitive responses. Self blame, emotional attachment to being in debt/victim of debt and not taking reposibility by blaming others is like driving whilst texting, we will crash and the mess will get worse.

Now you are ready to take the next practical step. Based on how much you owe and whether your debts are in collections or not you will need to consider which professional help is right for you. These are some options:

  • If your debts are repayable and you have income coming in consider talking to your bank about a consolidation loan at a lower interest rate than your current credit cards.
  • If your debts are all in collections, you have regular income and a bank loan is not possible research credit counselling societies in your local area.
  • If your debts are in collections and you have no regular income coming in call and research local trustees in bankruptcy/credit proposals in your area.
  • Call the credit card companies yourself and ask to speak to someone who has the authority to negotiate a repayment plan with you.

Other than a lower interest rate loan to consolidate debts DO NOT attempt to borrow or re-finance. This will create more of a problem down the road.




Source

The Good News

Whatever your financial picture is right now you can change it. With some small adjustments to spending, saving at least 5% of your income and only using 10% of your net income towards discretionary expenses, possibly picking up a second job or renting out a room in your home for more drastic situations your finances will become healthier.

Comments

    0 of 8192 characters used
    Post Comment

    • Lizam1 profile imageAUTHOR

      Lizam1 

      5 years ago from Victoria BC

      Your Comment (open for 5 minutes)

      CarNoobz I have also discovered and published a hub about an online tool called Mint.com. It may help you both to fill that out and see where you have things in common. Oftentimes looking at the bigger picture helps us refine the day to day details. Thanks for reading.

    • CarNoobz profile image

      CarNoobz 

      5 years ago from USA

      It's a constant struggle for us. I think the hardest part for my wife and I is just getting on the same page. We have the same long term goals, overall, but it's the daily spending decisions where we differ greatly.

      Great topic, though. Even a month after New Year's -- no, ESPECIALLY a month later. By now our New Years enthusiasm is waning and it's time to refocus on our goals.

      Voted up

    • Lizam1 profile imageAUTHOR

      Lizam1 

      5 years ago from Victoria BC

      Thanks teaches12345. It has taken me some years to get that and glad to have got it now.

    • teaches12345 profile image

      Dianna Mendez 

      5 years ago

      I like the way you ended this important topic, it is never too late to change and to start saving for a rainy day. Living within your means and saving for the future is the best way to budget. Voted up++

    • Lizam1 profile imageAUTHOR

      Lizam1 

      5 years ago from Victoria BC

      Thanks Vickiw - budgets can raise a feeling of being deprived which can be difficult. It certainly is so much less stressful when we are able to budget and learn to enjoy the resources we have.

    • profile image

      Vickiw 

      5 years ago

      For a lot of people budgets are boring, but I find them really interesting, as this is the way I have always worked. It is very useful when you are on a fixed income, in fact it can make life so much richer!

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)