In this segment of The Marc and Mandy Show, Debt Relief Specialist Jennifer Croft from 4 Pillars Debt and Credit Restructuring Company shares how to create a family budget.
Mandy: If you know that a budget should be part of your financial plan, but you’re not quite sure how to get started, I have Jennifer from 4 Pillars with me to give us some advice on this. So, what are some of the key elements to look at when you’re starting a budget?
Jennifer Croft: So, the important element to consider is what’s called financial forecasting. It sounds like a really fancy word, but all it is is you’re going to just predict what expenses are going to come up in the next 12 months. And it’s important that you calculate this because the more you master this element, the more prepared you’re going to be when these expenses come up. And the best way to calculate it is to create an exhaustive list of all these irregular expenses. And I would recommend looking at your previous 12 months of bank statements or creditor statements and look for these irregular patterns so you don’t miss anything. What you want to do is add up the total cost of annual expenses divided by 12 and whatever that amount comes up to is the money that you need to set aside in a separate savings account.
Mandy: Give me an example of what some of these irregular expenses might be?
Jennifer Croft: An example might be a vet bill, gardening, because not everyone gardens every year, something like your car maintenance would be great or home maintenance as well. So, these will be just some of the examples that you want to incorporate.
Mandy: Basically, those little surprise things that come up through the year.
To learn more, visit the 4 Pillars Debt and Credit Restructuring Company website.
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