Adding up your outgo
Using table below as a worksheet, list and calculate the money that’s going out. What are you spending and on what? The first column describes the source of the expense, the second column indicates the monthly amount, and the third column shows the amount projected for a full year. Include all the money you spend, including credit card an other debt payments; household expense such as food, utility bills, and medical expense; and money spend for nonessential expense such as video games and wii fit.
|
Item |
Monthly $ Amount |
Yearly $ Amount |
|
Payroll taxes |
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Rent or Mortgage |
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Utilities |
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Food |
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Clothing |
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Insurance |
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Telephone |
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Real estate taxes |
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Auto Expense |
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Charity |
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Recreation |
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Credit card payment |
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Loan Payment |
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Other |
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Total |
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Payroll taxes is just a category in which to lump all various taxes that the government takes out of your paycheck. Feel free to put each individual tax on its own line if you prefer. The important thing is creating a comprehensive list that is meaningful to you. You may notice that the outgo doesn’t include items such as payment to a 401(k) plan and other saving vehicles. Yes, these items do impact your cash flow, but they are not expenses; the amounts that you invest are essentially assets that benefit our financial situation versus an expense that doesn’t help you build wealth. To account for the 401(k), simply deduct if from the gross pay is $2000 and your 401(k) contribution is $300, then use $1700 as your income figure.
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