Know your Current Income/Expenses

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The second step to developing your financial plan is to take a look at your cash flow by examining your current income and expenses. This also helps in identifying those expenses that will not apply in retirement ( 401k, mortgage payment)

Estimate Income (salaries,, investment income, rental property income etc.

Estimate Expenses ( savings. housing, utilities, car payments, cash expenditure, discretionary expenses)

Review checkbook ledger and credit card statement for the past 6 months

Compare income with expenses

If income exceeds expenses (Congrats) save 1/2 of the excess cash

If expenses exceeds income (consolidate debts, increase income with a second job, eliminate expenses)

61 thoughts on “Know your Current Income/Expenses”

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