What's your budget for 2011?

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The year has just started and it's worth the time to think about (and take action) on increasing your income and the value of your assets, and also to plan your expenditure.
The government plans how to spend (our) money each year, so why shouldn't we do the same?

I've prepared my budget plan for this year. They include:
- Groceries
- Dining out
- Utilities
- Transport
- Healthcare
- Toiletries and cosmetics
- Shopping
- Gifts
- Travel
- Sports
- Electronics
- Insurance
- Taxes
- Allowance to parents

Other than for expenditure control, assigning a budget for travel and electronics helps me be less stingy with myself. I view them as luxury items so I re-consider countless times before buying and feel guilty after buying. Of course, I'll only consider spending money that I already have, not money that I hope to earn in the future.

I'll have to revise my budget when I start working to factor in higher transportation and food cost, and also for buying clothes.

People who have cash flow challenges should plan their cash flow in addition to their budget. Ever had a friend asking you for a loan to "tide over" a tough period? They'll tell you that their phone connections will be cut off, they'll miss their credit card payments, or have no money to feed the family. Sometimes they have money owed to them but it's not in their hands yet. E.g. salary payment was delayed, debtors are not paying up, funds are frozen because of divorce issues. But most of the time, people have cash flow problems because they had miscalculated, over-spent, or failed to set aside "rainy day" funds. There are also people who find themselves in such situations because of health or family problems.

But it's never too late to start planning. Be it by re-financing your loans, re-structuring your debt (e.g. transfer your unpaid credit card balance to a personal line of credit that charges lower interest rates - but make sure you check the administrative fee too), planning which payments need to be made before another (e.g. paying your credit card bill first to avoid the high interest rate), saving money or earning extra income, getting out of a bad financial situation isn't impossible.

The Singapore 2011 budget will be released today. Get excerpts of the Budget Speech via email or watch the live webcast at 3.30pmhere.

4 comments:

David said...

Yu-Kym,

We have a budget. For example we know from previous years we will spend approximatley $2,200.00USD for dining out.

Travel plans are on hold until some unexpected medical expenses are known and paid. While we have health care insurance, there are co-pays afterwards.

My current vehicles lease ends in a few weeks and a 2012 Ford Focus is the likely next vehicle. What is not known is what purchase options will be available in March as Ford's public plans change month to month.

Shopping, we know Christmas 2011 will have $800.00 budgeted, we usually go a little over.

Taxes when totaled between State, Federal and local take approx. 40% of gross income. The total tax we pay for 2010 is between $50,000.00-56,000.00USD. Ouch, that is a lot!

We also budget about $2K for miscellanous expenses.

Death and taxes, no one escapes either.

David

By nature all men are equal in liberty, but not in other endowments.

Thomas Aquinas

Yu-Kym said...

You have good control over your finances! 40% is alot to pay for taxes! Ya, death and taxes... can get fined thousands for paying $1 short.

David said...

Yu-Kym,

The IRS, (Internal Revenue Service) over here is not to friendly when one fails to pay on time.

BHO, wants to hire either 16,000 or 21,000 additional auditors for the IRS, supposedly to crack down on tax cheaters.

David

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.

Yu-Kym said...

I guess they call that job creation LOL