How To Budget Your Personal Budgeting
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With the rising cost of everyday items today creating a family budget plan is becoming more and more important to keep track of where your family’s money is going. Making your money work for you is the ultimate goal of any budget, but you need to be patient if you have never made a budget before.
Most financial problems, both personal and family, are a result of poor budgeting skills or the failure to follow the budget that is made. This is true of people in all income ranges. If you want financial freedom you need to be bale to track your assets and liabilities and your income and expenses.
The fact is that people of all income levels have the same struggles with money. People who earn thousands of dollars per pay check can have the same financial problems as those who earn just a thousand dollars per pay check. The problem isn’t the amount of money one makes at their job; it’s their behavior with their money once they get that paycheck. And the financial behavior of the majority of people is very poor.
A family budget plan is nothing more than a cash flow plan. A plan for your money. We make plans for everything else, from where we are going on vacation to blueprints for houses, but we seldom make a plan for our money. And if there is no plan then your money does not know what it is supposed to do other then get spent on stuff.
A good budget, once you get the hang of it which can take around three months, should take all of your family income and outgoing expenses into consideration. There should be a balance between the income and expense side of the equation. If not then it is time to start finding areas to cut back on. As you work your budget over time it should free up enough money that you can start making allowances for savings and retirement accounts.
The first step of any family budget plan is writing down on a piece of paper your total monthly income and your total monthly expenses. When writing down your expenses be sure to include everything from your biggest payment to the smallest expense. Subtract the expenses from the income and see if anything is left over. If not then you can start looking at the expense column and start cutting out unnecessary items that are costing money that could be better put to use else where.
If you have money left over you need to seriously consider where this money needs to go. If you have debts such as credit cards or car payments it is wise to put some or all of this money towards paying them down. If you have no extra debts start saving and investing. Before long you’ll have a nice little nest egg built that will secure your family’s future.
If you are having trouble keeping within your family budget plan here are four quick tips that can help you meet your goals.
1. Keep a log book or ledger where you can list you income and expenses on a daily or weekly basis. One of the hardest things for most people is keeping track of their daily money habits.
2. When buying groceries make a list before you go and buy all your groceries at one time. Make sure to stick to your list and do not buy things that are not on it.
3. Don’t go to the store if you do not need to buy necessary items. Impulse buying is a budgets worst enemy.
4. If you are tempted to buy something think about it before you make that purchase. For large items over $300 or so take a day to think it over. Chances are you don’t really need whatever it is.
To learn more about building a family budget plan please visit the website Household Budgets by clicking here.
Being the best financial consultant of your personal budget, the first thing you need to do is set a ‘Plan for your Budget‘. There are hundreds of books about writing budget plans and maybe thousands of ways, but in short it is all about controlling your money flow by include things like your income and expenditure. However, there are a number of things yo need to consider while working on your budget plan and these are:
A. Do It Now Not Later. Start working on your plan now. Don’t delay it and tell yourself that you are going to do it first thing tomorrow. You will never do it that way. Remember that delay is one of the most dangerous diseases of the man-kind since they resided on earth. Human-beings like delaying things that they delay repenting their sins and asking God for forgiveness until they depart from this temporary life and meet the Almighty God. They then will ask Him to be returned to the temporary life to do better. However, the Almighty will not give them this chance. Similarly, life will not give you the chance of becoming a better person if you kept delaying your financial plan. So, get up right away; bring your paper, calculator, pens, laptop, and bills; and start working on your plan. Now … means now … not after five minutes … not after you finish your dinner … not after you finish reading this book. NOW means NOW.
B. Don’t Complicate Yourself. Make it simple. If you have read books, attended courses, or watched or listened to directions on how to write a plan for your personal finance, you must have been complicated with the sum of information you were given and things you were told to add and subtract. Dear reader, all that is crap. You don’t need all those complicated steps and calculus to make a plan for your personal finance. All that you need are the following:
1. You need to know how much money you get weekly or monthly … monthly is better. Don’t leave anything out. Even if your spouse gives you a tiny share monthly that you don’t consider that much … mention it. This is known as ‘INCOME’.
2. You need to know how much you spend in the same period, i.e. weekly or monthly. Here also you need to mention everything you spend your money on even the things that you might consider tiny and harmless, such as, your child’s pocket money. This section will include things, such as, utilities like telephone and TV cable, pocket money, household, loans’ instalments, and transportation. This section of budget management is known as ‘Monthly Recurring Expenditure’.
3. You need to identify the amount that you spend periodically but not monthly, such as, the things you pay once a year like licences and insurance. Identifying these in advance will help you plan for them enough time before they are due. This section is known as ‘Periodically Recurring Expenditure’.
4. You need to identify the ‘Dark Holes’, i.e. where you put your money unnecessarily like when you spend money on gambling.
5. Finally, you need to write a Monthly Plan that shows you how much and when you get money; how much and when you spend it; and how much saving you can do- as illustrated below in Figure-1. That is the end of the first part … Bingo.
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My name is Saif and I am 37 years old. I live in Belfast, Northern Ireland, UK. I hold a Master Degree in e-Learning. I am currently doing my PHD in Business Management at the University of Bath.
It is always important to understand what a personal financial plan is, why it is important to have a one and when you should develop a it. Most people sit down to deliberately consider the implications of various courses of action and select the one they will follow only when faced with changed circumstances such as a new job, a big promotion, a new baby, a death in the family, imminent retirement, child ready for college and so on and so forth. Even when they do so, their decisions are usually limited to the specific issue that has prompted them to act. This is because most people do not have a comprehensive financial plan, do not know why they need one and often begin planning too late.
A personal financial plan is a systematic process of managing one’s financial resources so as to achieve personal satisfaction. Personal Financial Plan is advantageous in several ways all the more reason why it is wise to secure yourself with one.
You take control of your financial circumstances and save you the stress of becoming a reactive victim.
Stress and uncertainty in life is reduced
You are assured of avoided excess debt burden.
also reduces the economic dependency on others.
Over depending on others is no longer in your vocabulary
Enables you to achieve your realistic financial goals in a timely fashion
You and your spouse are always in good books and will make financial decisions that are well planned and effectively communicated.
You achieve your financial goals in a timely fashion.
Eliminates the sense of financial helplessness that leads people to depend on luck or get-rich-quick deals for success.
The above points make a lot of sense and anyone who respects his finances would want to lead to that direction. Let’s now look at picture of how such a financial plan would look like.
Personal Financial Plan Cutline or if your want it financial map:
Know your current financial Position
This is best clarified by calculating their net worth, which happens to be the difference between one’s assets and liabilities. Make sure you track your net worth by calculating it at least once a year to know your financial progress
Decide what you want to achieve in the near, medium and distant future
Like whether you want to buy a house or take your child to high school, whatever, but the goals must be specific, measurable and realistic.
A written Personal Budget is a key to strategic income management.
It is true that one cannot manage what they cannot measure. Without a budget, you cannot measure how much you are spending on.
Investment Plan.
Money simply sitting in a bank is as well as dead because it is wasting away due to inflation being higher than the interest paid by the bank. You must therefore decide how to invest your savings.
Personal risk Management
Plan on ways to approach a risk if it happens. Punicing at such moments will not solve the problem. If it were planned then ti is easy to deal with it.
Put your plan into implementation
Regular review of your plan is very important your plan to succeed, it must be a continuous process. Once you have your written financial plan, put it into action, and then review it at least once a year, making revisions as your circumstances, priorities and resources change.
One important aspect of financial planning is that it helps you begin preparation for the big challenges early giving you the opportunity to take advantage of the power of compound growth. Anyone who operates with a written financial plan is not caught off guard when their child is ready for college, such a person buys a home at their chosen time and one that is within their budget and retirement becomes a time to celebrate the golden years. Take advantage of this important information and start planning for your finances by coming up with a financial plan.
Poly Muthumbi is a Web Administrator and Has Been Researching and Reporting on Debt for Years. For More Information on PERSONAL FINANCIAL PLAN, Visit Her Site at PERSONAL FINANCIAL PLAN
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At the end of every fiscal year companies tallying up their scores to see how they’ve finished. Unlike the game of golf having the highest score is cause for celebration, being in the black you’ve done well and deserve some congratulations. If there isn’t a soirée going on in your business maybe it’s because you didn’t plan for a year-end party, and that could be the direct result of your failure to budget.
To be successful in business, budget cannot be a taboo word in your company. One of the skill sets you as an owner or manager need to possess is the ability to plan ahead, this includes that ability to budget. If you’re a visionary and lack budgeting skills, then stop reading and go find someone who is. So before we discuss budgeting tips, let’s first discuss what a budget is and isn’t.
What a Budget Is:
A budget is a proposed plan to monitor financial activity over a period of time. A budget is a planning tool an owner and/or manager should be using to measure trends over a fixed interval; this includes inflow, outflow, and asset/ liability growth. Finally a budget is a resource to forecast an assumed outcome.
What a Budget is NOT:
A budget is not the law; it is not to be used as a means of accountability and to ensure financial integrity. A budget is not to be used a ceiling to spending, and a method of absolute control. And finally a budget is not a guarantee so financial and business success.
So now that we have defined what a budget is, let us get to how to properly use and understand how a budget actually benefits a company.
The budget should be put together and approved at least 1-2 months prior to the start of the new fiscal year. This will allow for key employees to look at what the company is trying to accomplish and what is being aimed for. So for this to happen planning will need to take place approximately 3-6 months before the start of the new fiscal year, this of course depends on the complexity and size of the company.
The budget should reflect the direction that the company is headed in; this of course is handed down by the CEO and/or Board of Directors. Everything about the budget should point towards the strategic plan the company has adopted. The budget should also be multifaceted, not only should you include a Profit & Loss operating budget, but also a Balance Sheet budget to help track cash inflows and outflows.
Finally the budget should be realistic. An exponential increase in revenues without any foundational proof or purpose can lead to fiscal year failure. Again remember the budget is for mapping out trends in an attempt to forecast growth or decline. All the pieces must fit, in business there is usually a cause for increased revenues (hint: check for the reason in your expenses section!).
To summarize let’s recap the key points:
1. Budget is not taboo
2. Budget is a proposed plan
3. Budget is not the law
4. Approval should allow for time to disseminate throughout the company
5. Reflects the strategic plan and heading of the company
6. The budget should be realistic, for all growth there should be a reason
Jayson Cardwell is the Founder and CEO of Cardwell Financial Group, Inc. a not-for-profit and small/mid-size business consultancy and services company. Cardwell Financial Group, Inc. specializes in helping executive directors, owners, managers, and entrepreneurs realize their dreams of owning and managing prosperous and successful firms. They accomplish this by providing Financial Management, Analysis, Strategic Planning, Business Analysis, Executive Development, and Accounting Services and Consulting. For more information about Cardwell Financial Group, Inc and how they can help you visit them on the web at www.CardwellFinancial.com, or e-mail them at Info@CardwellFinancial.com.
In order for you to live comfortably, it would be prudent to have a budget that works for you. One aspect of a good budget it that it needs to based on your income and easy to adhere to. Having a friendly budget will motivate you to keep planning your finances prudently hence achieve your financial goals.
One of the important elements of a budget should include saving. An advisable way would be to have a savings account which you can be contributing to on monthly bases. Most banks offer an interest on such accounts hence you will benefit in the long run.
Another aspect would be to allocate some potion of your income to help the less fortunate in the society and not forgetting to give your tithe. God is the giver of wealth whether you believe it or not. Therefore, helping others will prompt the giver of wealth to release His blessing on you and one way would be by financially blessing you. In the bible, King Solomon stated that you should honor your God with your substance.
A perfect budget needs to take care of windfalls like wedding anniversaries, birthday parties and the like. Since these windfalls do not occur on a monthly basis, many tend to ignore or overlook them not realizing it can greatly result to overspending.
Personal budgeting needs to take into account your current financial status in regards to your spending patterns and habits. This will make it easy for you to make the necessary adjustments and maybe alter your spending habits and adhere to your financial plan.
Stephen shares his experience in Self Development Tips that will definitely Add Value to your Life. (Website:) Self Improvement Tips
Stephen shares his experience in self development tips and ideas that will add value to your life. Website: Self Development Tips
Stephen shares his experience in self development tips and ideas that will add value to your life. Website: Self Development Tips
Have you even encountered this situation? You get the salary and then you start spending. You would like to buy a new watch, a new shirt and on. However, at the middle of the month, you will probably find that you are in short of money.
You may then try to borrow some money. This may put you in a serious trouble because it is only an endless cycle. You will start spending at the beginning of each month. And you will not able to repay the debt in time. It is just like a snowball, you will have more and more debt.
As a result, you should try your best to manage your money by setting a budget for yourself. Without any surprise, you need to consider both your income and expenses. For your expenses, you should also give priority to each item you will spend money on.
First of all, you will need to take a look at your needs in the long run. You will need at least a saving plan so that you can achieve your goal in the long term. Of course you should also consider all you need to spend in the short term. This will affect how you can achieve your long term goal.
Now you have to go back to your budget planning. As discuss, you have to give priority to your expenses. There is something you have to pay for every month. For example, you will have to pay for the utility and rents so as to keep your living standard.
Then it is the turn of your other consumption. For example, you will try to take a look at how much you spend on food every month. Remember to check how much you usually spend on entertainment, this can be important in the later stage.
In the next step you will take a closer look at your income, you will need to estimate how much you earn every month. Try to list it out side by side with your expense. Then you will know how much you can save every month.
If you find that your expenses are normally larger than your income, you will need to cut the expenses down. The first thing you may cut down will probably by the expenses on entertainment. You have to plan your budget in a way that you will not need to borrow even a buck!
The author has great interest in finance. You can check his blog on Forex and Financial Planning Tips. Be sure to check Stock Market Analyzer Essential Tips and Tips for Life Insurance for Over 50s.
