Hi Michelle, as you are aware that I will implement a rewarding system during the school holidays. This rewarding system works in such a way that each essay that you post in your blog will earn you one golden coin. You can accumulate your golden coins and redeem for money to purchase the story books that you like. You can redeem your golden coins at anytime but please take note that the deadline is on 31 December 2009.All the excess golden coins in your accounts will be forfeited after the redemption due date.
In order for you to keep tract on how much golden coins you have earned in your accounts, an income statement will be provided to you on weekly basis.
My intention of doing all this is to let you have an idea of how a basis financial plan works. You will be able to gain some knowledge on the fundamental basis of managing your hard earn money. The rule is that you must have a financial plan to ensure that your expenses must not exceed your earned income in order to achieve your pre-set financial goal. For instance, you income is $10.00 and your financial goal is $8.00 then the maximum expenses you can spend is only $2.00. It is just simple as that. Got that?
Let’s me go further about needing a financial plan. We should have a plan mapping out our financial goals. The plan might start out when you are younger and then get more detailed as you become older and know more about your income, expenses, and goals. So what should be part of a financial plan?
First, you should record your income and your estimated income for the coming years. This will give you a basis for what expenses you can take on. After you have your income down, write down your goals, starting with one year goals and then write down any large expenses you expect to buy or take on within the year. You need to specific in detail of your fixed expense. Then add in your discretionary costs such as vacations, gifts, entertainment, etc.
After you have your income and overall expenses written down on paper, it's time to put some dollar signs next to your goals. If your monthly income is $30.00 and your fixed and discretionary expenses total $10.00 then you have $20.00 to use to start saving for your goals. The first thing when you have obtained your monthly income, you must make it as a habit to save up $20.00 in your accounts. Then you can spend the balance of your planned fixed and discretionary expenses of $10.00. You must be very self discipline to control your compulsive spending habit to avoid over-spending.
If you have encountered a situation whereby there is an unplanned expense incur for the month, then you can look into your discretionary spending and see what you can cut down or cut out in order to keep your financial goal achieved. This is where your budgeting comes in. And this perhaps may be where you may try to live more frugally so you can meet your goals with your current income. Alternatively, you might want to try to bring in more income to meet your goals' expenses. The act of writing down a financial plan will help you understand what types of goals you should be saving for and give you a clear picture of how to allocate funds generally. Creating a budget will give you monthly specifics.
As time goes by, your goals will be revised and updated to reflect realities. Having a financial plan will help you make wiser choices with saving your money and will help you meet your goals in life.
Hi Michelle,
ReplyDeleteSchool Holidays is coming around the corner. Please sumbit me your plan for the coming scholl holidays
Hi Michelle, as you are aware that I will implement a rewarding system during the school holidays. This rewarding system works in such a way that each essay that you post in your blog will earn you one golden coin. You can accumulate your golden coins and redeem for money to purchase the story books that you like. You can redeem your golden coins at anytime but please take note that the deadline is on 31 December 2009.All the excess golden coins in your accounts will be forfeited after the redemption due date.
ReplyDeleteIn order for you to keep tract on how much golden coins you have earned in your accounts, an income statement will be provided to you on weekly basis.
My intention of doing all this is to let you have an idea of how a basis financial plan works. You will be able to gain some knowledge on the fundamental basis of managing your hard earn money. The rule is that you must have a financial plan to ensure that your expenses must not exceed your earned income in order to achieve your pre-set financial goal. For instance, you income is $10.00 and your financial goal is $8.00 then the maximum expenses you can spend is only $2.00. It is just simple as that. Got that?
Let’s me go further about needing a financial plan. We should have a plan mapping out our financial goals. The plan might start out when you are younger and then get more detailed as you become older and know more about your income, expenses, and goals. So what should be part of a financial plan?
First, you should record your income and your estimated income for the coming years. This will give you a basis for what expenses you can take on. After you have your income down, write down your goals, starting with one year goals and then write down any large expenses you expect to buy or take on within the year. You need to specific in detail of your fixed expense. Then add in your discretionary costs such as vacations, gifts, entertainment, etc.
After you have your income and overall expenses written down on paper, it's time to put some dollar signs next to your goals. If your monthly income is $30.00 and your fixed and discretionary expenses total $10.00 then you have $20.00 to use to start saving for your goals. The first thing when you have obtained your monthly income, you must make it as a habit to save up $20.00 in your accounts. Then you can spend the balance of your planned fixed and discretionary expenses of $10.00. You must be very self discipline to control your compulsive spending habit to avoid over-spending.
If you have encountered a situation whereby there is an unplanned expense incur for the month, then you can look into your discretionary spending and see what you can cut down or cut out in order to keep your financial goal achieved. This is where your budgeting comes in. And this perhaps may be where you may try to live more frugally so you can meet your goals with your current income. Alternatively, you might want to try to bring in more income to meet your goals' expenses. The act of writing down a financial plan will help you understand what types of goals you should be saving for and give you a clear picture of how to allocate funds generally. Creating a budget will give you monthly specifics.
As time goes by, your goals will be revised and updated to reflect realities. Having a financial plan will help you make wiser choices with saving your money and will help you meet your goals in life.
What???
ReplyDelete