Summarize your annual income, your fixed expenses, and your optional expenditures. Use your tax returns, your checkbook, and your charge card statements to get your figures as accurate as possible.
A two-year summary is best - last year and this year. Divide the current year into estimated figures and actual figures that you can fill in after this year is over. You'll find it informative to compare figures from year to year and to compare your estimated (budgeted) figures with actual figures.
When your summary is completed, examine it to see how you compare to these recommendedmaximum expenditures as percentages of total income:
Housing - 28%
Installment debt - 20%
Taxes - 20%
Installment debt - 20%
Taxes - 20%
If your figures are significantly higher, investigate further to see if you need to make some changes.
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