Thursday, September 15, 2011

Single People Need Budgets Too

Many financial experts highly recommend a household budget in order to keep family spending and savings goals on track. It makes sense that proper money management for a household is a necessity to ensure financial security for all family members. For those who do not yet have families, it is equally important to establish a budget to prepare for the future as well as survive day to day, especially when single individuals are just starting out on their own, financially independent from their parents.

Why Singles Need Budgets

Overspending income is the reason why so many people are facing debt problems. With a budget you can properly account for where all of your money goes on a weekly or monthly basis. Without a budget, it can be all too easy to spend cash as a single person because outside of basic financial obligations, there are likely no other responsibilities to tend to such as children who need things or spouse who should have a say in money matters.

As a single person without a budget, it is also easy to lose sight of the big picture. Spending what you earn as you earn it leaves little room for saving for the future or building a truly solid financial foundation.

How to Start a Single Person Budget

A budget is simple to get started. Sticking with the methods is what gets many people who end up ceasing their good financial habits. It makes sense to develop a simple budget that allows you to make simple entries that doesn’t waste time. A weekly review of a budget is all it really takes to ensure you are on target.

Developing a budget requires that you gather all of your financial obligations for a month including utility bills, credit card bills, mortgage or rental payments, and any other monthly expense paid out on a regular basis. You will also need to gather your income statements so you know how much you bring home each month.

These amounts along with the creditors who receive your monthly payment should then be listed on a personal budget worksheet. Once all of the information is entered, the total amount of expenses should be deducted from the total amount of income. If the difference is negative, it is a clear sign that you need to make cuts to your budget or find a way to earn more money. If there is an overage, the funds that are ‘left over’ each month should be allocated into a proper savings account for emergency situations, vacations, or retirement.

In addition to the compilation of expenses and income, single consumers should also take a solid month to track the money they are spending and where they are spending it. This is for all expenses outside of regular financial obligations, including coffee stops, dining out, and transportation-related expenses. By tracking every penny spent in a month’s time, you are able to develop a more accurate budgeting system and as a result, establish a much more solid and reliable financial foundation for the future.

This is a guest post by Tisha Tolar.


ChampDog said...

A friend of mine tracks every single of his spending and he does it everyday. Since young, I failed to do that and I just not that type of detailed tracking person.

So, what do I do is track my bank saving account balance in each month. From there, I know how much I spent monthly. Sounds good?

Hope this approach will be helpful to you if you find difficult to spend every single cents daily...

Nathan McDonald said...

Always been curious to see how stocks work, this has explained sooo much for me and I'm actually going to start researching and testing various methods. Thanks for the introduction for us novices looking to learn! :-)


ChampDog said...

Did you comment at the wrong post? This article is about budget tracking and it is not really related to stock. Anyway, thanks for your comment. :)

kampunginvestor said...

Single, old, young, men, lady, couple, married all also need to budget. Never budget meaning big trouble.

To ChampDog, it is not necessary to be like your friend to to detail tracking of the spending every month because to my opinion it is a waste of time le. I would rather advice you to take the time to make more money so that you will get the chance to spend more! ^+^

What about this idea? Should be better then your friend's one i guess! lolx..

ChampDog said...

Some people born with able to manage their money well even without a tracking tool and some don't. For those who don't, they need some kind of tracking.

Focusing on making money is good but the bottom line is still your net income. If you make a lot of money but with low net income, it is not good too! :)

So it depends. Truly rich people, think like you and they really make a lot of money. But I'm quite sure I"m not those truly rich people. :D Hehehe...

Jobless Girl said...

Indeed, every one need budget planning.

ChampDog said...

That's true, not only for single. :) That's why there is a "Too" at the end of the title. :)

maveric said...

Hi CD..saw this interesting topic & reckon that I write from my current experience.

As you are aware,I am a retiree and..
I have a ring file,use single lineA4
paper(divided into 3 columns diagonally for a quarterly expenses 4 sheets = to 1 year/12months tracking)

Actual networth,actual expenses & 'knowing exact $ to last until..?..(fill in the time-frame)give you a sense of financial control.

You are right..other than the EPF $,fd's,saving accts,insurance 'surrender values'& stock values sum up the networth's total.Just like a 'stock-take',last month $ closing balance is current month opening networth...& the tracking goes on.

I think all retirees should make this monthly tracking chore into a habit.I personally write in the entries..because using a spreadsheet somehow is less satisfying!It is emotionally comforting when the numbers point to our intended $ direction.


ChampDog said...

The more you need this tracking when you don't have the income or your income is not stable. So it is definitely a good habit for retiree so you know exactly how long your expenses can sustain.

And I prefer spreadsheet a lot, perhaps it is flexible enough for me to automate certain stuff! :)

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