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REQUIRED INCOME

After you have estimated what all of your monthly expenses will be, you need to figure out how much income you need to bring in. It is quite simple to figure this out. All that you need to do is add your target monthly income and your monthly expenses together. The number that you get is your required income. For example: If your target income is $2,500, and your monthly expense is $3,200, then your required income is $5,700.

Once you figure out how much income you are required to make to keep budget, figure out if your target income was too high or too low. Are you going to be able to make this amount of money each month? Review your numbers to assure that they match your goals.

Now you have an idea of what your cash flow should be like this year. As the year goes on, you will probably readjust your budget a few times to meet new goals, increase your profit line, and anticipate problems.

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