So far I have an accounting system in place and have captured my budget into the accounting system – so what is next
I can now hone in on areas of expenses that need to be improved – and see how much cash is left over to improve my Balance Sheet
Any cash left over from my monthly PNL will be transferred to my mortgage so that I can fast track the repayment- so instead of it taking me 28 years to repay my mortgage ( I will be 81 years old ) – I have decide to pay as much as I can towards reducing this debt in a matter of 5 years – you can get any debt reduction spreadsheet on the web -I have obtained a really good spreadsheet from Financialmentor.com – just go to the calculator section of Tod’s website
There is the old saying that what gets measured gets managed so what this exercise has done is focus my resources on areas of my Balance Sheet that can be built much faster by reducing me debt quicker
The next area I am going to look at is my retirement fund which I contribute to on a monthly basis – this is legislated in Australia and is called superannuation. In the USA it is called 401K
Lessons for your kids
Show your budget to your kids and explain the concept- this will be an important lesson for them in explaining how the household budget is run and the consequences of over spending