How is budget planning done?
By following good budgeting strategies, one can ensure the successful management of his or her expenditure and the recording
of savings so that investments may be made for securing one’s
failure. Increased life expectancy has raised the amount of money
one requires after retirement. This means that there is a need for
increased retirement savings, while most people are living pay
check to pay check or depending on the credit card depth (which
has a high interest rate) to raise their standard of living. Thus,
there is a growing need for effective personal budget planning.
The budget planning can be done in the following steps;
✽ Step1: calculate your income: this should include income
from all sources, including your pay check and interest from
any investment.
✽ Step2: determine your bill for essentials: list out your essential
expenses which may include rent, grocery, clothing,
telephone and electricity bills, health insurance, gas and car
maintenance. Then, calculate the amount spent on each.
✽ Step3: determine your depth elimination: note down
your total depths, including the interest payments on the same.
✽ Step4: determine the bills for the non-essentials: your list
of non-essentials may include vocations, gifts and trips to
restaurants. Calculate the amount spent on each.
✽ Step5: calculate your savings: by removing some money
from your income as it may help you to resolve the future
problems that are not planned for in your budget.
Benefits of budget planning
Some of the major advantages of budget planning are:
✽ It puts checks or balances in place in order to prevent over
spending at various levels.
✽ Takes into account the unexpected need for funds.
✽ Helps you to maintain your standard of living.
✽ Helps you to make the future plans which will lead you to the achievement of your recent goals.
