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Old 07-22-2004, 02:11 PM   #2 (permalink)
hrdwareguy
"Officer, I was in fear for my life"
 
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Location: Oklahoma City
First you have to look at the historical data to see where you are. Typically, income won't change often. About the only time it will is when you get a raise or change jobs.

Once you have your income figured, look at all your static expenses. Rent/mortgage, insurance, car payments, utilities. These are your fixed costs.

Subtract your fixed costs from income. Then start trying to put some reason to your variable costs. Extra spending money, gas money, groceries. Try and average these out over a period of time. Subtract these from the above amount. The left over amount is disposable income. This is what you have to spend on other variable or fixed cost items.

As for forcasting, you will have to know things like do you get an annual raise of a certain percentage and figure that in. When looking at new job opportunities, if you know what you will be making, you can figure that in.

Good luck, I've done this a few times at my house. Even though I do this, still seems like we get bit in the butt every so often as well.
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