Basic Budgeting Concepts

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Budget Concepts

Once you have a clear concept about Budget Basics (Income, Expenses, Savings), the next step is to develop a budget. When it comes to concept, no two people do their budgets exactly the same and no budget is perfect for everyone. 

 

With computers, new apps and tools, it is easier to follow a budget now. The customization and editing features give the user better options and the chance to adapt her/his budgeting practices for their own understanding. The new tools provide more information and show results to help you find the problem quicker than spreadsheets. 

 

So what is the real deal? 

it is learning about what you do and what is really happening to your money. 

 

Understanding your money flow is half the battle. If you have to go through your bills, then you start getting a much better idea of what you are spending on. The budget needs to include as part of your expenses: 

  • Actual costs and,
  • Savings versus planned costs 

 

The results will give you an idea of whether you increase your Savings or you are short on money. Then there is a way to compare real monthly activity and a way to see where adjustments need to be made. This action is needed to get to a balanced budget (without excess expenses or bad debt).

 

Remember that it is necessary to go through the full budget steps to prove that good budgeting is being followed and that will take some time to master. From this information, it is easy to tell what is happening and what kind of action should be taken to remedy the situation.

Once budgeting is done correctly then after a while the expenses become less important, in fact, only bad debt expenses need to be recorded and watched over. 

 

Then, guess what? You won’t have to do all of the dirty work of sorting the expenses and adding them up. Keep the records of course just in case something needs to be looked up, but that is it. 

 

Controlling spending and debt means less time budgeting. 

 

More time to focus on your savings and plan your future. 

 

It will take some time to master it or to get the whole picture, once you start to budget, the steps will come easier with practice. 

 

YBP will show you how successful budgeting leads to mainly checking our savings and debt. In other words, if your spending is close to your target and stays under control, then you mainly save money according to your targets and make sure you don’t build up any debt. 

 

The overall results are:

-  Savings that are on target and expenses that are on a budget.

-  Financial goals are much easier to attain and will be greatly appreciated when they are reached.

-  Less time spent on the budget

-  Less overall financial stress.

 

 

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Review: KJ/DB