Category: Budgeting

What is net worth? Your net worth is your personal bottom line. It’s what your total holdings are worth after subtracting all of your financial obligations. In financial terms, your net worth is equal to your total assets minus your total liabilities. A statement or listing of your net worth is equivalent to the balance…

What is the spending plan? Your spending plan is essentially your budget. By using a more positive name, you can escape the feeling of restriction that often accompanies the term budget. Your spending plan is a tool to help you achieve financial goals that otherwise might seem impossible to reach. It is a way to take charge…

What is the reasonableness test? When forecasting what the future might bring, whether in terms of income or expenses, it is always prudent to ask what is actually reasonable to expect. The question is simple, but the answer, often, is not. The reasonableness test is most difficult to apply in areas where you have little…

What is estimating expenses about? Estimating expenses is similar to estimating income. Both are equally important and use a prior period’s information as their starting point. Naturally, some expenses are more difficult than others to predict and therefore require conservative estimating. Since, unlike income, expenses can arise from tremendously diverse sources, estimating expenses is more…

Do you ever wonder where your money goes each month? Does it seem like you’re never able to get ahead? If so, you may want to establish a budget to help you keep track of how you spend your money and help you reach your financial goals.  Examine your financial goals  Before you establish a…