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It's fun to read financial profiles. Humans, by nature are curious how much other people make and how they live with what they make.
Profiles can communicate someone's salary, how many children they have, how much they save, how big their mortgage payments are and what else they spend their money on. In the study of profiles, it's amazing to find that how much one saves has little to do with how much one makes.
Today you get to write your own profile. It can be a very revealing exercise and I encourage you to participate. Please take a moment and get a piece of paper and pencil. I'll wait for you.
Ok, ready now?
If you are like me, you probably didn't go and get that piece of paper. Go ahead; get it now!
At the top of the sheet, write your name and occupation.
If you are married, list your spouse as well and their occupation. Then list your children and their ages.
Next, list your combined annual income.
Now, of your total annual income, how much (percentage and dollar amount) do you save. Please categorize them as follows:
Annual Amount for each:
| Retirement: | $1,000 | 3% |
| Mutual Funds: | $0 | |
| Emergency/CD/Savings: | $500 | 2% |
| Educational Savings: | $0 | |
| Other: | | |
What??? You say you don't know? Well, take your best guess and move on.
Now, write down some of your other budget items:
What are your annual expenses for the following: (I've plugged in some numbers and percentages as an example.)
| Groceries: | $3000 | 10% |
| Eating Out: | $1,500 | 5% |
| Movies: | $960
(2 a mo. w/snacks) | 3% |
| Mortgage/Rent: | $13,000 | 43% |
| Vacation: | $2000 | 7% |
| Car Payments: | $4800 | 16% |
| Clothes: | $1200 | 4% |
| Auto Insurance: | $1400 | 5% |
| Gasoline: | $400 | 1% |
| Other: | $240 | 1% |
TOTAL INCOME = $30,000 Total % should equal 100
Isn't it interesting to see the numbers annualized? They definitely make a greater impression on my mind and give me a wider perspective.
This exercise is a bit different than a budget. A budget lists your monthly expenses. We are focusing on ANNUAL expenses. Sometimes monthly expenses make a bigger impression when they are annualized.
If you have a budget, this exercise will be easy. If you don't have a budget, you are probably completely lost and I hope that I've made a point. You will NEVER get your finances under control if you don't know where your money is going!
Get a budget. Find out where your hard earned money is going. Document your current profile and then create an ideal profile as a goal. Each year, make some changes in your lifestyle to get you a little closer to your goals.
About The Author: * * * ~ ~ ~ * * * ~ ~ ~ * * * ~ ~ ~ * * * ~ ~ ~ * *
By Doris Dobkins Publisher of the free weekly ezine $mart Money New$. To subscribe : click on this link or visit her web site
P.S. Hot Off The Press FREE Gift For You. Get Doris' Free 7-Day Budgeting Course One chapter a day for 7 days. Send a blank email to: budgeting@freeautobot.com
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