Posted by admin on Mar 21, 2010 in
How To Budget
What is a budget?
A budget can be considered a description of your financial plans. It is a list of estimates of your revenues and expenses for a given period of time; usually pertaining to the future and not the past. The purpose of a budget is to:
Provide a forecast of revenues and expenditures, and Enable the actual financial operation of business to be measured against the forecast.
Why budget, what are its benefits?
To many people creating a budget may not sound like the most exciting thing in the world to do, however, taking the time to construct a one will be very beneficial to you in the future. For instance, after building a budget you know exactly what is going on with your finances. Personal budgeting allows you to know exactly how much money you have and are spending on a regular basis. In addition, a budget shows you how your finances are being allocated, or in other words where your funds are being distributed. Additional benefits of budgeting are as follows:
You become aware of your income and spending habits You take control of your finances Your free up extra money You reduce stress Helps to build for the Future
Types of Budgets
In today’s society many different types of budgets exist; such as budget for a start up business, a corporate budget, an event management budget, a government budget, and a personal or family budget, just to name a few. Creating these strategies although quite similar have key differences that pertain to there individual needs. Below is a simple step by step process to assist in creating a budget for your personal needs, i.e. business, family, etc.
(Time needed: 30 min. – 1 hr.)
Step 1: Gather every financial statement that you can.
This includes bank statements, investment accounts, utility bills, and any information concerning income or expenses.
Step 2: Record all of your sources of income.
A list of every source of income. For example, full or part time job paychecks, self employed revenue, etc.
Step 3: Construct a list of all your expenses.
This list is an estimate of all the expenses you plan on acquiring over the desired course of the budget, usually monthly. Payments include, mortgage, automobile, insurance, groceries, college tuition, entertainment, etc.
Step 4: Divide expenses into Fixed and Variable.
Fixed Expenses: expenses that stay the same or relatively the same month to month (i.e. mortgage, auto, insurance). Variable Expenses: expenses that change from month to month (i.e. entertainment and groceries)
Step 5: Total your monthly income and expenses.
If your income is greater than your expenses that great, you want to try and keep it that way. On the other hand, if your expenses exceed your income you will have to make some changes to you style of living.
Step 6: Review your budget monthly.
It is important that you review your budget from month to month to ensure that you are still on the right track and nothing has changed. This process will only take a few minutes and will show you where you may need to improve or cut certain expenses.
As you can see creating a budget is very simple and straightforward. If you take the time to sit down and construct one, you will find your budget plans are more likely to be a great success. By taking simple steps you will find that living within a budget is not as hard as it seems and is very beneficial. I leave you with this question, what is more important, living your life in debt or insuring a secure future for you and your family?
My name is Ryan Cook. I am a 21 year old senior at West Chester University of Pennsylvania. I am currently obtaining a bachelors degree in finance, with a minor in accounting. This is my first article on Article Base, but hopefully not the last.
Tags: Better, budget, Lies, life
Posted by admin on Feb 26, 2010 in
How To Budget
Your home budget software or budget spreadsheet should be aiding you in reaching your L.T.G.s. in life. If you are tired of living week by week, month by month, and existing without actually living. And you want the fruits of life and not just the mere act of existence. Then, by all means, I seriously suggest that you start by adding some L.T.G.s to your daily financial diet! Oh… You want to know what L.T.G.s are? Of course! L.T.G. is the short way of saying, “Long Term Goal”. I know…Your thinking “Sure, right, my life consists of three Children, one spouse (actually forth child), rent, car loans, and a bank balance that hovers somewhere between going and gone!” Yet, L.T.G.s are not impossible when employing an comprehensive strategy geared from the outset to the achievement of your long term goals in life. As a matter of fact, anyone, at just about any level of income can have and achieve their long term goals in life.
Did you know that there are two driving forces, or perspectives at work in achieving your long term goals in life? It true, they are yours and the author behind the home budget or budget spreadsheet you have opted to use on a daily bases; and any commitment failure from either end will most likely cause a derailment of any and all of your long term goals. So let us take under consideration, these two perspectives and how they apply to achieving your long term goals in life.
The first perspective is of course yours, and is broken down into two parts. These two areas are your personal commitment to achieving your long term goals and will work apart from your budget spreadsheet; but they are none the less foundational to its success. First, you will need to exercise focus and/or determination. Please, keep in the cracks and crevices of your mind that abstract goals in life that are akin to “power”, “financial freedom”, and “being rich” are nice; but will soon fade away, since wealth and power are at best relative; you will never earn enough, nor have enough power. Ergo, these are unfocused and unrealistic “types” of goals to have in life. Focused goals in life should revolve around items of need, trips or get-a-ways, and personal achievements. Thou, this is not a comprehensive list; these are however, tangible and attainable for the resolute of mind. Secondly, you will also need to allow for time in reaching your long term goals in life. Many families become discouraged in the short term, soon giving up for failing to grasp this basic concept in Long term goal achievement. When looking at other families we tend to see the results and not the determination, hard work, and time that had produced such results. So please, work hard, remain patient, focus on each goal, and allow for plenty of time!
The last perspective is the authors’ and is reflective in the type of budget spreadsheet or home budget software he has designed for you to use. This is the authors’ commitment in aiding you to reaching your long term goals in life. It should be interjected at this point that the purpose of any budget spreadsheet or home budget is only to provide useful information in one form or another. It does not decide on which bills to pay, nor the order in which they are paid. Simple put, your home budget is not your brain; it is a means to an end! That being said; the types of information provided will have a direct bearing on your ability to reach your long term goals. Information such as daily bank balances, your lowest balance in the year, and bank balance trends over a period of time. It is not wise to have a long term commitment without understanding it impact on your finances today and all of your tomorrows to come. The authors’ commitment should also include easy to use software or spreadsheets. There is nothing more taxing on the mind than trying to navigate through a hard to use and complex home budget or budget spreadsheet.
So, now that the lights are starting to dim and everyone has gathered up all of their belongings as they prepare to leave and journey to their perspective homes; what will we take away with us and remember the most about this article? That there are two perspectives or driving forces that impact your ability to reaching your long term goals in life.
While it is our responsibility is to be focused, coupled with patience and time; the authors’ responsibility is to provide useful information in an easy to use and understandable format.
My name is Michael Reichwein and I would like to invite you to come and visit our home budgeting spreadsheet website at http://www.bottomlinebudget.com today. You will be able to see the solutions that we have implemented in our budgeting spreadsheets that have enabled families from all over the world in making their home budgeting dreams come true! Take the challenge! Come, use our free download, and see if you can start building your dreams today!
I am Michael Reichwein, the CEO of Bottomline Budget. My wife and I have called Pennsylvania, USA our home for more then 30 years to date. We originally, did not intend in selling our “family home budget spreadsheets”, as a web based business. However, as time advanced as it usually does, it became unavoidable. The funny part was that I did not venture out into the internet looking for software and spreadsheets advocated by other authors in order to gleam as it were, the elements they had gleamed from others. Instead, my concept was in building the spreadsheets around the needs of our family at that particular time in history; and then placing those derived elements into an easy to use format. I am sure that if you use them, you find them as useful as my family has over the last Eight years!
Michael Reichwein (CEO)
http://www.bottomlinebudget.com
Tags: Achievements, Against, budget, Fight, Home, L.t.g., life, Spreadsheet
Posted by admin on Feb 25, 2010 in
How To Budget Shakespeare Theatre’s Bonnie Monte describes a life in theater
Bonnie Monte, artistic director of The Shakespeare Theatre of New Jersey, spoke to members of the Thursday Morning Club in Madison on Thursday, Feb. 11. She spoke about her career in the club’s Wise Wonderful Women lunch and lectures series.
Read more on Independent Press
Tags: Bonnie, describes, life, Monte, Shakespeare, theater, Theatre’s
Posted by admin on Feb 22, 2010 in
How To Budget
Where does the idea of sitting down a coming up with a personal budget rank on your list of “things I can’t wait to do”? If you’re like most people, it’s probably somewhere between jabbing a fork in your ear and getting a root canal. Can’t say we blame you, devising a budget for yourself is definitely not the most stimulating activity in the world. But for financial well-being, it’s an absolute must. It needn’t be too painful though. With today’s technology, budget-making is pretty much a snap. Just remember, the goal of creating a personal budget is threefold: 1) to list your expenses, 2) to set future goals, and 3) to cut costs to meet your goals.
Where does your money go?
The first part is always the hardest when it comes to starting a budget. You need to find out where your money is going on a monthly basis. You could dig into bank statements, credit card receipts and check ledgers, then hand write every expense you come across on a sheet of paper. That’s one way to go. The other, simpler way is to use the amazingly intuitive personal finance software that’s available today.
Programs like Quicken and Microsoft Money were built to help you track your budget. Simply input your expenditures, divide them into categories (e.g., auto, food, clothing) and subcategories (e.g., fuel, dining out, shoes) and boomthe program will spit out a detailed report of your monthly income and expenditures.
An even easier way to track your budget is through online banking. Most banks offer a service where you can download past account activity and plug it directly into a finance program. It some cases, it’ll even categorize your spending for you. How easy is that?
What are your goals?
Thanks to your software program, you’ve just discovered how much per month you drop on those gourmet coffee drinks you love so much, great. But now what? Now you need to set some goals for yourself.
Don’t be shocked if your report says you’re spending more than you earn. It seems unfathomable, but Labor Department statistics show that many families who make less than $50,000 are spending a bit more than that annually. If you’re one of them, it’s time to slash your spending. Even if you’re not in that boat, there are still probably a few expenditures you can do without.
As a general rule, you should reduce your spending to 90 percent of what you bring in. The rest of that money should go into savings and/or investments.
Slash and Burn
Upon further review of your budget, some cost-cutting measures will become painfully obvious. Eating out and other entertainment costs will probably stick out the most. Expensive clothing might be another. Search for those small, trivial costs that you can do without and eliminate them. You won’t miss them.
While the little things can kill, there are also bigger costs you can probably reduce. Take a deep, long look at your lifestyle. Is your car a little too luxurious for your pay scale? Are you dining at five-star restaurants a little too often? Are weekend getaways becoming routine? If so, cut back. It may not be pleasant, but it’s necessary.
Finally, take a look at things like your bills and taxes. If the mortgage you’re currently paying is two or more percent higher than what’s available, look into refinancing. When it comes to filing your tax return, make sure you’re maximizing reductions.
Tags: budget, Easier, life, Little, Setting, Sticking
Posted by admin on Jan 13, 2010 in
How To Budget Volunteer work can add new dimensions to life
If your New Year’s resolution involves helping others, the Parkland offers numerous ways to volunteer.
Read more on Park Hills Daily Journal
Tags: dimensions, life, Volunteer, work