4 way to control your cash intelligently

Let’s start on the plus side of
your financial picture.
Calculate your family ’s
monthly net income—what
comes home, not what you
and your spouse or partner
make before taxes and the
rest . For most people this means
a paycheck or income from self-
employment. Some people ’s
income also includes tips,
royalties, rental income,
dividends, regular gifts from
family, disability payments, child
support, or the like
Start by listing all your
categories of expenses, such
as debt, food, rent or
mortgage payments,
entertainment, child care, and
more . You might want to break
some of these down into
subcategories, like mortgage
debt, student loan debt, and
credit card debt. The greater the
detail, the better, so as to
remind you of easily forgotten
items (like the camping
equipment your child will need
next summer).
Next, estimate approximately
how much you must spend (or
plan to spend) on each of
these categories every month .
It’s a little artificial, because not
all expenses will be monthly—
some will occur weekly,
irregularly, as a single lump sum,
or even yearly. You ’ll have to
play with the numbers to put
them all into monthly terms, but
doing so will help you picture
your cash flow over a
manageable time frame. For
your spending information, look
over old receipts, credit card
statements, and if you use an
ATM card or make electronic
payments, your bank statement.
Don ’t forget any automatic
monthly withdrawals, such as for
your DSL line, DVD rental
service, or gym membership.
Receipts and bank statements
won ’t tell the whole story,
however. Most people pull out
$100 or $200 from the ATM and
lump it as ‘cash,’ but they don’t
know where it goes. So search
your brain and write down your
regular and predictable outlays
of cash, such as for parking
meters, breakfast muffins, and
vending machines. Include on
your list any regular deposits you
make into savings or retirement
plans such as your 401(k). For
your outstanding credit card
balance, enter the minimum
payment as a monthly expense,
but recognize that you’ll want to
work toward paying this off
before too long.
Caution!
When dealing with weekly
expenses, don ’t just multiply
them by four. It may seem picky,
but there are 52 weeks in a year,
and some months have more
than four weeks in them, so your
calculations should take that into
account. Let ’s say, for example,
that you spend $50 each week
to hire a housekeeper. You
might think that you ’re spending
$200 per month (4 x $50), or
$2,400 per year (4 x $50 x 12).
But wait: Your true annual
spending is 52 x $50 = $2,600, a
$200 difference. The accurate
way to get your monthly
spending on weekly activities is to
calculate the annual figure and
then divide it by 12 (52 x $50 =
$2,600 / 12 = $217).
If possible, go through a full
year ’s worth of receipts and
records to figure out which
expenses come up only once a
year or irregularly over the
course of a year . For example:
you’ll probably want to take an
average of your spending on
things like each family member’s
medical care or birthdays. Also
look for significant one-time
expenses like your car
registration and insurance. If
you ’re not using a software
program to help you with this,
simply take the total costs per
year and divide by 12 to get a
figure to add to your monthly
budget