{"id":521,"date":"2014-06-30T12:00:07","date_gmt":"2014-06-30T17:00:07","guid":{"rendered":"https:\/\/extrapolatethis.com\/blog\/?p=521"},"modified":"2014-06-29T23:02:09","modified_gmt":"2014-06-30T04:02:09","slug":"budgets-net-worth","status":"publish","type":"post","link":"https:\/\/extrapolatethis.com\/blog\/archives\/521","title":{"rendered":"Budgets &#038; Net Worth"},"content":{"rendered":"<p><strong>Budgets<\/strong><\/p>\n<p>I can&#8217;t stress enough the importance of doing a monthly budget, regardless of your income, and also computing your net worth month over month.  How else do you know if you&#8217;re on track for long term goals or just want to make sure you&#8217;re not spending more than you&#8217;re bringing in?<\/p>\n<p>We budget everything each month, and I do mean everything.  With things are as tight as they are today, we need to stay on track and make sure we&#8217;re not increasing our debt.  Every dollar counts!<\/p>\n<p>Budgets can be pretty simple or really detailed.  The good thing is it&#8217;s easy to start out and add more detail month to month if you want.  If you have Excel, a little work up front will help make putting a budget together pretty easy. <\/p>\n<p>In its simplest form a budget is a forecast.  You calculate your income and subtract all expenses.  Bingo, you&#8217;re done.  Hopefully there&#8217;s a positive number at the end.  If it&#8217;s negative, you&#8217;re spending more than you&#8217;re bringing in and your debt will grow.  If you want to stay out or get out of debt, then changes need to be made.<\/p>\n<p>Budget example:<\/p>\n<p>Total Income = $1000<\/p>\n<p>Expenses\t <\/p>\n<ul>Rent\t$500<\/ul>\n<ul>Electric $75<\/ul>\n<ul>Cable\t$82<\/ul>\n<ul>Gas\t$65<\/ul>\n<p>Total Expenses = $722<\/p>\n<p>Balance = $278<\/p>\n<p>Not sure where you stand each month with your expenses?  An easy way to figure it out is to use a credit card for the month to capture all expenses.  Of course, as long as you can pay it off right away.  No need to unnecessarily carry a balance and get hit with finance charges. <\/p>\n<p>A budget helps with planning for one-time expenses too.  A family vacation on the horizon?  Maybe driving school for a new driver?  Plugging that into your budget will help ensure you can cover these one-time expenses.<\/p>\n<p><strong>Net Worth<\/strong><\/p>\n<p>You may be asking yourself, why should I be interested in my net worth?  Well, a couple of good reasons.  Maybe you&#8217;ll be looking to get a loan for a car or a mortgage or have long term goals to retire someday and not work as much or at all.  Tracking your net worth will tell you how well you&#8217;re doing.  It&#8217;s an eye opening experience tracking your net worth month over month.  Sometimes it&#8217;s not pretty, but it&#8217;s good to know where you stand.<\/p>\n<p>Where a budget is somewhat of a forecast, net worth is actual.  In short, it&#8217;s your assets minus your debts.<\/p>\n<p>Net Worth example:<\/p>\n<p>Assets\t <\/p>\n<ul>Home\t$150,000<\/ul>\n<ul>Retirement\t$12,500<\/ul>\n<ul>Savings\t$3,000<\/ul>\n<ul>Checking\t$1,250<\/ul>\n<p>Total Assets = $166,750<\/p>\n<p>Debts\t <\/p>\n<ul>Mortgage\t$12,2000<\/ul>\n<ul>Credit Cards\t$2,200<\/ul>\n<ul>School Loan\t$23,000<\/ul>\n<ul>Auto Loan\t$9,800<\/ul>\n<p>Total Debts = $157,000<\/p>\n<p>Net Worth (Assets &#8211; Debts) = $9,750<\/p>\n<p>Even if your net worth isn&#8217;t a positive number.  Don&#8217;t stress.  You&#8217;re taking the first step in fixing it just by tracking your net worth.  Now you can put a plan in action to turn it around!<\/p>\n<p><strong>In Conclusion <\/strong><\/p>\n<p>I challenge you to do a budget if you&#8217;re not doing one already, plan one out just a month or two.  Track your expenses, this is huge.  I have friends who did this and were amazed to find out how much they spend eating out.  They weren&#8217;t tracking it before and now realize how quickly it adds up.<\/p>\n<p>At the end of the month, update your budget with actual ending numbers so you can see if your budget was in line.  Then do a net worth calculation.  Month after month you&#8217;ll see you become somewhat addicted in finding out if you&#8217;ve made progress.  And you can measure any changes you&#8217;ve made to see the impact.<\/p>\n<p>We&#8217;re not financial experts, just sharing some things that have helped us out.  But we&#8217;re willing to help.  If you have questions, feel free to shoot us an email via the CONTACT US link and we&#8217;re more than happy to give our $.02  \ud83d\ude42<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Budgets I can&#8217;t stress enough the importance of doing a monthly budget, regardless of your income, and also computing your net worth month over month. How else do you know if you&#8217;re on track for long term goals or just want to make sure you&#8217;re not spending more than you&#8217;re bringing in? We budget everything <span class=\"ellipsis\">&hellip;<\/span> <span class=\"more-link-wrap\"><a href=\"https:\/\/extrapolatethis.com\/blog\/archives\/521\" class=\"more-link\"><span>Read More &rarr;<\/span><\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"Budgets & Net Worth http:\/\/wp.me\/p3SUar-8p","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[5],"tags":[],"class_list":["post-521","post","type-post","status-publish","format-standard","hentry","category-finance"],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3SUar-8p","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/posts\/521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/comments?post=521"}],"version-history":[{"count":7,"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/posts\/521\/revisions"}],"predecessor-version":[{"id":523,"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/posts\/521\/revisions\/523"}],"wp:attachment":[{"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/media?parent=521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/categories?post=521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/extrapolatethis.com\/blog\/wp-json\/wp\/v2\/tags?post=521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}