What is a budget? In the United Kingdom a budget is an itemized statement that reflects the financial status of the U.K. for the coming fiscal year. It contains proposals for spending, for tax purposes, and is presented to the nation in a speech delivered by the Chancellor of the Exchequer. It compares to the State of The Nation speech by a U.S. President. Another meaning of the word budget as found in the dictionary is: a plan specifying how the resources, especially money, will be allocated or spent during a particular period. It can also mean the total sum of money set aside or that will be needed for a specific purpose.
There are a few more definitions of the words budget and budgeting, but for the purpose of this article we’ll stick with those mentioned above. Budgeting and having proper budgets can produce less stress. And the absence of stress leads to a healthier more pleasurable life.
Yet, there are hundreds of people in the world today who have never made a budget of any sort. To them the question of budgeting remains a situation of laissez faire; let the coin fall as it may. They prefer to let life’s event take their natural courses without personal intervention.
Whether one sits with pen and paper, or places a laptop on their legs, knowing where you stand financially is of utmost importance. You need establish a budget in preparation for the rainy day. The safest way to build a nest egg for the future or build an emergency fund is to establish a budget. Some say you need to set aside 3 months of cash for those unforeseen circumstances.
We spend money like there is no tomorrow In Shakespeare’s Hamlet, old Polonius warns his hard-headed son Laertes about the pitfalls of borrowing and lending; in other words, the dangers of incurring debt.
It is from this passage of literature that we find the quote “Neither a borrower nor lender be”. When you lend money to a friend you run the risk of losing both the friendship and the money. In today’s world, our biggest cancer is not of the physical kind, but of finance – debt.
Now, almost four hundred and fifty years later, we as a people have all but totally ignored the advice of Polonius. We continue to borrow money left, right, and center. We have become a nation of spend-thrift people. We spend money like there is no tomorrow. Millions of families have no savings for their children’s college fund; no savings for vacations; no savings for general upkeep; and no savings for retirement.
The majority exist from one paycheck to the next. How sad will it be for those who will reach age 90 and still find the need to fill out applications and submit resumes for employment? With all the great medical advances present today, we continually add years to life, but not life to years. Some have even become cynical to the idea of frequent physical exercise. They rely on medication for their survival. Maybe it is due to the quality of home entertainment that we have largely become a sedentary nation. The potency of television programming very much outweighs the desire to shed the extra pounds.
There is no budgeting for weight loss. So we keep spreading at the hips and elsewhere. The budget you act upon today could save a life. The life you save could be your own.
Allan Russell is a native of Barbados in the West Indies. The students on his school bus love to hear his imitations of Donald Duck’s voice. He is a network marketer with a passion for singing and writing songs. http://www.allanrussell.com
http://www.pioneercredit.com/newsletters/articles/archive/oftware_budget_tools.asp
Keeping a budget and tracking your expenses is the best way to manage your money. If you own a home computer it can make this financial chore a lot easier. Along with online banking, there are many user-friendly programs that do all the hard work for you. All you have to do is use the information to control your spending habits and save.
The two most popular programs are Quicken® and Microsoft Money. Quicken® is available for both Macintosh and PC formats, while Microsoft Money is only available for the PC. Microsoft Money Deluxe 2006 was listed at $ 59.95 (www.microsoft.com/money). Quicken Deluxe 2006 was listed at $ 49.99, while the Macintosh version was listed at $ 59.99 (www.quicken.com).
(All prices as of August 25, 2005). Larger versions are available that will track investments and manage small business finances. Shop around, many stores will offer mail-in rebates where you can save a significant amount of money. There are many other programs that are cheaper and do not have as many features, but will help with finances. It is important to shop around and find a program that will meet all your personal needs. Whatever you choose it will help you track expenses and monitor your budget.
These programs have features that show you where your money is going. You can set up categories like entertainment, clothes, food, etc. They have connections with many banks that allow you to bring up your savings, checking, or credit card accounts. It will put your spending information in graphs and compare your averages in each category per month. These easy-to-read graphs will show you if you are reaching your financial goals, or if you are close to exceeding your budget for the month. Many programs also have a tax preparation feature, making it easier to do your own taxes and save money by not having to take them to a professional. You may also be able to find tax breaks and deductions that you qualify for. Another popular feature is online bill paying. The program will remind you of all your bill’s due dates. You can set them up to be paid out of your account automatically or manually and you don’t have to worry about stamps or the time it takes to get there by mail.
Security is also another good reason for keeping track of all your expenses at home. Instead of looking at your statements only once a month, you can now monitor it everyday if you wish. So any suspicious activity will be noticed right away. If you choose to do all you banking online you can eliminate paper statements, which could be used to steal your identity. It is also important that you have a good security program for your computer that includes virus and spy-ware protection.
With a little more work, a spreadsheet program can be used to keep track of your spending. You can set up columns that contain categories (around 20). The first column is for where you spent the money and the second column is for how much. The next columns are the spending categories. This will help you to keep track of everything you have spent and to know where your money is going. Add up your columns to get your totals. Divide each category’s total by the total amount. (In the example below, divide 153.79 by 771.83 to find out that 20% of your budget goes to food). Microsoft Excel is a good spreadsheet to use and they even have a downloadable budget template that makes it easier to use. If you lack a computer you can also use the trusted pencil and paper method, it works just as well.
The point is that when you have a visual perception of where your money is going it will help you to control it. When you see that 5% of your monthly income goes to gas-station coffee, you may decide to start brewing your own at home. I encourage you to explore the opportunities of a personal finance program either through your computer or a notebook.
Our accredited credit counselors will help you take control of your financial life and get out of debt faster than you can on your own. We offer a debt management program that will stop the collections calls, lower your monthly payment and provide you peace of mind. Our pre and post bankruptcy counselors provide an easy process for you so you can focus on rebuilding your financial being.
It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.
As important as the budgeting process is, it is extremely difficult especially for people who don’t have enough financial exposure. The most important tool used in the budgeting process is the budgeting spreadsheet. The budgeting spread sheet makes the budgeting process a lot easier however some people find it difficult to use a budgeting spreadsheet. Due to the ever increasing demand for a user friendly and easily available budgeting spreadsheets, many Microsoft office programs provide various kinds of budgeting spreadsheets. The most famous amongst all is the Microsoft Excel Budgeting spreadsheet. The Microsoft Excel budgeting spreadsheet has made the use of spreadsheet easier for many people.
If you are a beginner you can resort to using a free budgeting spreadsheet template. It will provide you the basic elements of a spreadsheet. As you become more experienced with the use of the budgeting spreadsheets you’ll find yourself getting addicted to the use of available templates.
When you become more experienced you can also opt for intermediate or advanced budgeting spreadsheet templates. The budgeting spreadsheet will help you in the management of your finances and will also make certain that everything goes according to your requirements.
The office template directory aids you in finding the budgeting spreadsheet templates. You can also use the budget calculator in Microsoft excel along with the budgeting spreadsheet template. It would simplify your work further. This software can help you create your annual budget very easily. It also helps you to make sure that you make the right financial predictions. These financial predictions will help you determine how you should spend your money in the coming future.
Along with the annual budget you can also prepare monthly budgets for your recent purchases. You should allocate a certain financial amount in your budget for each of your monthly purchase. This will give you a cost efficient solution to the problem of over spending and will also help you to create your spending schedule in order to avoid making any extra purchases.
Budgeting process has never been more easy and enjoyable as it is now with the help of these budgeting spreadsheets. These spreadsheets provide you an organized and systematic way of controlling the expenditure that you incur from time to time.
