Have you heard about BUDGET YOUR MONEY? Most of us heard about this for thousand times. If your organization or your family wants financial security, a budget is the only answer.
Let’s know What is Budget?
The budget is the estimate of income or expenditure for a period of time. In simple words, a budget is a financial plan based on finance and expenses. The budget involves revenues, resources, quantities, expenses, assets, etc. Some people opt to write the budget by hand, while others use a spreadsheet or budgeting apps.
A budget simply shows how much money you are making in a month and how much you spending. Budget is one of the important thing to build your great financial future. It helps you to prepare for emergencies, helps you to keep an eye on the prize.
How to Create and Manage the Budget?
Most of the people spend their precious time to think about how can we create a budget? But creating the budget is simple and there are following ways to manage it. Here are some important ways to create a budget plan.
Calculate Your Expenses- The first thing to create and manage the successful budget plan is to calculate the expenses of your organization and households. Calculate the expenses by the consulting bank statements receipts, and financial files. Start by making the list of monthly income. Because some expense are periodic like insurance, personal loans, functions, etc. Adding up the expenses is most important in creating the budget. By this you will get the accurate financial expense if you calculate and average for six months – 12 months.
Determine your Income- By getting clear that how much money you want to save monthly. Its time to determine the income. Apart from the actual salary get an accurate summary by adding the extra income you are getting from selling a product online, or cash gifts.
Start Saving- By spending too much on a particular thing more than you are making, it’s time for saving or cutting the annual expenses. The best way to figure out where you can save the extra expense is to track or record every expense of the month.
Record Spending- The best way to stay on your budget is to record all the income you are getting and expenses. Most of us record the monthly expense. By this, you get satisfied and prepare for upcoming emergencies by saving. There are too many ways to record all your expenses such as Finance Tracker App, Notebook and Pen, Spreadsheet, Online financial software, etc.
Types Of Budget
Every business owner or organization needs a budget strategy for their expenses. It helps to track the resources. Businesses use many types of budgets to calculate the spending and to create strategies for maximizing revenues. There are the following types of budgets.
- Master Budget
- Operating Budget
- Cash Flow Budget
- Financial Budget
- Static Budget
Choosing The Budgeting System
There are following budgeting system to record the expenses and income.
- Notebook & Pen: This is the oldest and least expensive method of budgeting. This method helps to record the expenses. Simply write down all the expenses and income. Some people still use this method.
- Spreadsheet: The most popular spreadsheet is MS Excel. Many organizations use this sheet for budgeting. A spreadsheet lets you know a lot of information easily.
- Online Software: There are several online software that helps in budgeting such as Manilla, Mint.com that allows you to create your expenses in categories and track your spending.
- Expense Tracker Apps: There are also financial app like TAKEFIN FINANCE TRACKER app. By this, you can track your expenses and manage the financial records.
How to Manage a Budget at Home?
Taking care of your family is quite hard and managing the finances is quite more difficult. Here are some ways to create and manage the budget for your family.
- There are following software and apps to track your expenses Takefin Finance Tracker App and expenses tracking app offers you great budgeting tool, in that you can record or track the income and expenses coming in and out of your account.
- Think about the long term and short term like a month to month or week to week budget planning that is necessary. Along with the income, planning ahead for down payments of vehicle loans, home loans, or periodic expenses are essential.
- Look for ways to increase the savings. If you want to save money for an emergency or for the future there is a simple way to save. All you can do is 50% of your income spent on living expenses like rent, groceries, etc.
- 30% of your income spent on what you want for entertainment, for dining out, for fun. 20% of your income try to save.
- Set and schedule the time and focus on getting the things you have to pay like rents, life insurance, loans, etc.
- Use list while going for shopping and only purchase those items. It is the best way to stick to the budget. Write down the necessary thing you need to purchase before going to the store.
How to Manage a Budget in Business?
Once your business starts its necessary to plan and manage the financial performance. Creating and managing the budget is the most effective way to keep your business on track.
- First, do plan for business success, successful businesses invest the time to create and manage the budget and regularly monitor finance and performance.
- If your business is growing you have to split up the budget in areas like sales, production, marketing, etc. Budget is the thing that ensures you to stay in control expenditure.
- There are too many benefits to a business budget like it manages your money, it will monitor your performance, help to plan for future, etc.