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Budgeting and Net Worth
Budgeting and Net Worth
When should you budget your spending?
Tools to use to help you budget
Net worth calculations
When should you budget your spending?
Only 60 percent of Americans budget
Most begin budgeting after a lifestyle change (new child, new job, new home)
If you're saving at least 10 percent of your salary and are fairly confident that you'll meet your financial goals, you probably don't have to budget
But you need to track your spending if you
- Have any credit card debt
- Aren't saving 10 percent of your salary
- Live in an uncertain situation (seasonal business, potential layoff)
- Are trying to achieve a major goal (new business, major vacation)
Tools to use to help you budget
Some spending categories to consider
Quicken
Microsoft Money
Net worth calculations
Useful to know net worth for
- Insurance
- College education
- Estate planning
Software packages like Quicken or Microsoft Money automatically calculate this for you
Include market value of assets after appreciation (home) or depreciation (autos, computers, appliances)
Realize most of your furniture and other personal effects will have little market value