How to Make a Personal Budget
A budget is a financial tool that is extremely important to the economic progress of a person, family, organization, company, government, etc. On a budget you can project with some accuracy the costs and revenues that could happen in a defined time.
It is very important to different budgets for each of the stages of life which consist of expenses, as may be the home, family, holidays, going to the cinema, meeting with the bride and more. The budget is your plan to make sure you only spend what you have to spend, and to make adjustments where necessary.
When a person wants to start saving or paying your debts the first thing you have to do is decide how much money is available for one or the other. The budget is just a simple description of the money coming in, and as it comes. To create a budget just have to define:
Income:
Where the money goes? Keep in mind if the money is fixed, or change month by month when you make your plans. For example: if you work with your tip income can change from month to month, in this example you could put an average number.
Expenses:
The costs are divided into two things: The needs and expendable. If something is essential as food, transportation and shelter, there are very few changes you might make. However, things like outlets, services, etc. could reduce or expire. Remember that the primary should be spending your savings (at least 10% of your income).
The budget formula is:
INCOME – EXPENSES = PURCHASING POWER
If your purchasing power (Net Worth) is negative it means you have to make adjustments. If purchasing power is positive you should take the remainder and save it. The rule of the game is to get you in positive or zero. You can use a program like Microsoft Excel to help you with your arithmetic.