Why should you consider my financial advice? What are my qualifications? What makes me a credible source (or am I credible at all)? Click here to see my why. Onto the purpose of this post: balance sheeting, and budgeting.
Before I flex the spreadsheet, please allow me to explain some financial terminology that may have some readers boggled (skip the bold below if you already know these terms):
Profit: how much money you make
Expenses: how much money you spend
Assets: items, stocks, or other things that make you money
Forecast: an estimate of how much money will be spent
Actual: how much money was lost or gained
Year to Date:How much money you will make the entire year, should you remain on budget.
Our life expenditures equate to our expenses. Our salary, assets, interest, and rental income all contribute to the profit side of our balance sheet. Ideally, you want your profit to be larger than your expenses. That way, you can invest money into other assets to make more money.
In my opinion, before getting started with investing, it is imperative that we have a budgeting system in place that gives us overarching view of where our money is going. Here’s a picture of my automated Excel Spreadsheet that I’ve used for two years now. If you would love to have a copy of this spreadsheet with all the formulas created by yours truly, please leave your email in the comments, and I will get back to you as soon as possible.
Another source I have used in the past to budget is www.mint.com. Be weary though, Mint requires a lot of your information, which is something I am personally not comfortable divulging, hence why I created a Excel Spreadsheet.
I hope this post provides you with a useful resource, and defines some murky financial vocabulary for those that are new to investing.
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