Planning – Do you know how much of your income is disposable?

Disposable Income is defined as: “income that remains available for spending after deductions for taxes and other obligations.” So the question remains, do you know the actual amount of your annual disposable income? If you don’t, then do you belong to the class of people who consider themselves “fixed for life”, if there is such a class? I say that because we have seen a lot of “well off” people who have had great wealth loose it overnight; the reality is that in most cases it was being siphoned off gradually over time. They say the loss came because of a misplaced trust in people who guided them or handled their resources. So given that example, we must realize that we are ultimately responsible for our financial situation.

It has been said that “with knowledge comes power” and in this case you need to gain a complete understanding of where your resources are going. Every family will have varying amounts of disposable income, but that amount is normally relative to that family’s lifestyle. Again, it doesn’t matter how much you make or have, it can all disappear overnight. Disposable income if not watched, or allocated, is like having a hole in your pocket, like a black hole, it just diminishes until it is gone. Worst yet, unallocated income represents a missed opportunity; it could have been applied to achieving goals. Goals might include: retirement, accelerated bill pay-off plans, and savings. Regarding savings, you might consider savings that are targeted for specific things. Again, be specific. Power comes, when with discipline, you take control of your finances and apply them in a way that will meet your needs and goals.

Some of you might be saying, sure I believe I can see my disposable income; I might even be able to allocate it, but reports don’t ensure I am on track, or warn me if I am about to jeopardize a goal. And since I don’t frequently review the reports, I am off track before I know it. Well, Living Budget Pro^® was designed from the ground up with planning in mind. For $59.99 the cost of a pair of pants, it will reveal your disposable income. Beyond that, it contains a tool that will locate your disposable income by income period and present it to you on a single form. The tool provides you with a method of allocating all, or a portion of those funds to one, or many existing or new expense sources. That means that you will be able to visually see how you are applying those funds to meet your goals. Once you have finished, the form will update your living budget with those changes.

Living Budget Pro actually creates and manages living budgets. Basically, a Living Budget is a method of displaying your finances in a contextual, editable format where you can easily see the potential of earnings. Living Budget Pro creates up to a year’s worth of transactions based on your income and debt sources. Future transactions are placeholders and the program uses them to display your financial potential and keep goals in sight. Living Budget Pro incorporates a fully functional check register which is used to keep your living budget up to date. As you enter check register entries, you will immediately see if that transaction has placed a goal in jeopardy. The program also provides a means for you to create many what-if scenarios and tailor a spending plan that meets your needs.

Please note that it is incumbent upon us to take a more disciplined approach to the management of our finances; Living Budget Pro can help. Please consider purchasing Living Budget Pro today.