As I’ve already expressed, your entire year is not just one month multiplied times 12. Your year is full of different events and one-time events that can greatly influence your money. The next step is to capture all those things in your 12-month snapshot. Here are a few to start with:
Three-Check Month. In Step 3, we mentioned the “three-check” phenomenon. Be sure to look at a calendar and include this for the two months out of the year where this occurs. That will give you two extra paychecks you would have missed with the traditional one month budget model. That should also help out your bottom line quite a bit.
Expenses: Don’t forget about:
• Bills that happen every quarter. For example, my water bill comes once every 3 months.
• Property taxes
• Back-to-school shopping
• Any other big one time expenses coming up
Other Income: The year doesn’t have to be all bad. There are also a few times a year that add some good to your budget:
• Income tax returns
• Bonuses / profit sharing
• Dividend income
Now you’ve got a much more accurate picture of what you’re going to spend each month throughout the year and how that will affect your bottom line.
So how did you do? Let’s talk about adjustments in the next section.
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