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Budgeting for Success

Fri, 11/09/2012 - 4:26pm | by monicasflores

I'm a big fan of monitoring your success "by the numbers," meaning finding a number and tracking that over time, to get a sense of how your project is going.

For example, in a business, you could track income and expenses per month (your profit and loss statement) as well as your balance sheet (how much the company is worth at any given moment). In a household, consider tracking how much is being spent on specific items such as food (groceries and meals out), housing (mortgage or rent), taxes (local, state, and federal), transportation (bus or train fare, gas costs), entertainment (outings, films, events), and/or school expenses/tuition.

During the holidays, we tend to get together for family vacations and gatherings: my family and I recently returned from a trip to the Philippines to attend a cousin's wedding as well as do some family business. Typically, the largest expenses are plane fare and hotel fees. Transportation and lodging expenses can usually be deducted as a business expense if you are meeting for office-related or work-related purposes; however, if you are travelling for personal reasons only, you may not be able to claim this deduction. For that reason, I recommend you run at least one kind of home-based or locally-based business, so you have an opportunity to meet vendors, clients, partners, to source your materials or recruit workers on any of your trips. Plan for your vacation by figuring out how much you can spend and when you will go.

What you definitely do not want to do is overspend your budget or use your credit cards to finance a trip: if you are in this situation of spending more than you earn, I recommend you look into a debt consolidation plan. A great way to budget for your trip is to break down your expenses into daily estimates. For example, how much does your lodging cost each day? How about meals? Do you anticipate renting a car or taking public transportation? Here is a great resource on family vacation budgeting with many tips on ways to get the most value out of your time together.

A typical vacation budget might include the following:

Fixed fees: Transportation expenses to and from destination $_________ (Gas or plane fare: also remember tolls, one-time fees, and parking)

Pocket money $_________

Daily budget: Lodging: Hotel, hostel, or room $_________

Food: Breakfast, lunch, dinner, snacks, drinks $_________

Transport: car, bus, train, local fares $_________

Tips: gratuities and meals $_________

Activities: tickets, admission fees, excursions $_________

Shopping/souvenirs: $_________

Take your daily budget and multiply it by the days you plan to be travelling. For your vacation, have a clear plan as to what you can afford, prioritize what you'd like to do, and find a destination that matches your budget and goals.



photo by RambergMediaImages

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