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1.Think of a budget as a useful toolóa written financial plan that helps you set goals and measure progress.

2.Start by coming up with a sales revenue target. Make it your best estimate.

3.Based on past experience, estimate your cost of goods sold (e.g., 70 or 80%percent of sales, sometimes 0% of sale is also on cards if product has nothis to speak about...) and subtract it from the sales revenue to come up with your estimated gross margin.

4.Forecast variable expenses (items such as travel and commissions that vary according to the level of sales) and fixed expenses (items like taxes and rent that stay the same, regardless of sales). Subtract these expenses from your gross margin to arrive at your estimated net income (before federal taxes).

5.Break your annual budget into quarters and monitor your progress every three months to detect problems and make corrections.

Once you have a proper idea of your expense and spending habits, itís time to start off with a simple budget. Again, you donít really need a formula or great tips on budgeting. Itís this simple: Jot down what your net salary is. Take a small amount as your saving. Then, assign amounts to your necessities first and entertainment later. However, make sure this amount is less than what it was earlier in the bills.First month, it would be quite difficult as you arenít habituated to a budget and frugal living. However, once you get the feel, start reducing the amount assigned to each category and gradually increase the savings. Living with a budget isnít difficult if you are disciplined and dedicated. Also, donít try to push too hard to repay all your debts at once. Itís a slow and gradual process. Instead of adopting a quick change, try to adopt a behavioral change.
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