14 May This Might Be a Good Time to Create a Budget
You probably don’t need a CPA like Tampa Accountant Brian Sanders of Walter S. Sanders & Associates to explain why you might want to consider putting your household on a budget. The novel coronavirus pandemic has led to record-levels of unemployment as well as the closure or partial shutdown of countless small businesses across the country.
The challenges you might face in creating a budget lie in the same things that have created the need for budgeting among countless households in Tampa, the QuickBooks experts at Sanders & Associates say. The economic uncertainty linked to Covid-19 has set the markets on an unpredictable roller coaster ride, so it is not hard to imagine what it is doing to individual household budgets.
You might be able to protect yourself from some of that volatility if you have a budget in place.
How to Create a Monthly Budget
You might be afraid of the math, but putting a budget isn’t very complicated. In fact, the hardest part might be realizing your limits.
Step 1: Determine your after-tax income.
If you collect a paycheck, just add up what you get paid every month. “If you have automatic deductions for a 401(k), savings, and health and life insurance, add those back in to give yourself a true picture of your savings and expenditures,” the folks at Nerd Wallet recommend. If you are self-employed, you might want to average out your monthly income based on the figures in your 1040 tax return.
Step 2: Decide on a budgeting plan.
You’ll find all kinds of helpful apps you can use to help you figure out the details of your budget. If you want to keep things simple, you might want to consider using the 50/30/20 rule. “The 50/30/20 rule budget only requires you to track and divide your expenses into three main categories: needs, wants, and savings or debt. This reduces the amount of time you have to spend detailing your finances and allows you to focus more on the big picture instead,” Credit Karma explains.
Step 3: Keep good records.
Again, you can find all kinds of online tools and apps to help you keep track of the money you are spending.
We’ve also provided a number of financial tools and some helpful information. If the pandemic has put you in need of a consultant for your Tampa business or an accountant for your Tampa family, please contact us.