Surprisingly, only a few people have a budget plan. Some people seem to find it difficult to optimize their finances quickly and sustainably with this simple tool.
The most important elements are:
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- Income: wages, pensions, additional income and interest
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- Fixed expenses such as taxes, rent, energy, interest and transport costs
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- Variable expenses: household, pocket money, leisure, gifts, holidays and provisions for security and savings
Such a three-part list can be quickly created on an A4 sheet of paper or with our Excel spreadsheet.
The revenue
In addition to wages, the category “other income” also deserves attention: is the time spent on secondary employment well spent and rewarded? If you have savings, are they earning interest or being used profitably? Even small amounts can now be used as shares in loans, real estate or stocks.
Expenditure
Fixed expenses in the budget
Housing costs and interest often make up the largest part of budget planning. This is where optimization is worthwhile: when choosing a property to live in, or when it comes to the mortgage for a home.
Insurance also makes a big difference. It is often worth getting comprehensive advice on what is really necessary and where there are good deals. However, it is very time-consuming if offers from each insurance category have to be compared individually. Advice often leads to the goal more quickly and at a lower cost.
Taxes are often seen as a burden but also as a requirement. With tax planning and the right deductions, you can reduce the burden on yourself. correct completion of the tax return by a professional is the first step, with tax planning over several years further optimization can be achieved.
Variable expenses
All personal expenses fall into these categories.
goal of budget planning
Whatever is left over at the end of the calculation should be used carefully for optimization. This way, further unnecessary costs can be avoided (e.g. leasing), more taxes can be saved and long-term goals for financing education, a home, hobbies or travel can be achieved.
Extensions
The “private budget planning” is usually used for the current year. However, it can also be extended to include multi-year planning in order to Budget with changes over time.
More tips are in this Post summarized.
Summary
Budget planning The basis is created so that income and expenditure are balanced. It is also helpful for multi-year financial planning and tax planning and optimization. It can also be very useful in preparation for new phases of life with changes in the family or at work. For support with the budget, Simpletax the annual meeting service for tax planning.