II – Budgeting

Many individuals get into financial trouble even though they earn a good income. On paper at least, it appears that they’re earning enough to cover their living expenses.

However, more often than not, expenses come due between pay periods and when it’s time to pay the bills, there isn’t enough money left over from the last paycheque to cover them. Many resort to borrowing money from credit card cash advances or payday loan outlets. Because these forms of borrowing are so convenient but expensive, it’s not too long before someone can find herself with a lot of debt due to poor cash-flow management.

Here is a tool called the Pay Planner. It’s essentially a monthly budget broken down into pay periods. Its objective is to allow individuals to budget their spending so they don’t run out of money before the next pay date.

Here’s how to use it:

  1. Click and save the spreadsheet to your computer and then open it. You will need to have Microsoft Excel to use this tool.
  2. The spreadsheet automatically calculates the subtotals and totals. You just need to input the data. Use the appropriate worksheet depending on whether you’re paid bi-weekly, twice-monthly, or monthly.
  3. For each pay period, input the date you’ll be paid (in the Yellow cells) and the amount you’ll be paid
  4. Input your estimated monthly expenses, paying particular attention to which pay period the expense becomes due
  5. After inputting this information, you’ll be able to see on the bottom of the form whether you will have a cash surplus or deficit for a particular pay period. You should adjust your expenses accordingly.

If you have credit card debt, here is a Credit Card Payment Calculator that will calculate the payment you should be making each month if you wish to pay off your credit card debt within a specific period of time. This is a very useful tool for you to optimize your financial resources so you can pay off your credit cards as soon as possible.

© Copyright Fong and Partners Inc., 2011.

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