Home budget – how to plan monthly expenses? | Loan PortalUncategorized
Imagine a company boss who doesn’t know what’s happening with the money in his company. This is not a good thing about it, and it may end up with a complete lack of control over your and your employees’ finances.
Subsequent amounts leak through the fingers and instead of growing, the company loses and falls into decline. We are the same enterprise – with our revenues, expenses and home budget planning. How to control them? What tools to use? How can we make our home budget work well?
If we want to take a serious approach to only seemingly known to everyone topic, which is the household budget, let’s start with its definition. Most of us define it as a statement of revenues and expenses, and although it’s correct, it’s too general. It is very important to specify the time period and to make the appropriate statements. It doesn’t matter if we settle our budget on a weekly, monthly or annual basis. It all depends on our willingness, earnings and the number of financial operations performed. The more they are, the more often it is worth looking at.
The idea of the home budget is to equalize the amount of income and expenses, which in practice means that we have planned the use of each zloty. If we go out with our revenues and expenses to zero, it means that the budget is balanced. A deficit occurs when expenditures are higher than revenues – this situation can be generated by loans and credits that exceed our monthly financial standing. If our expenses are lower than revenues, a surplus is created in the budget, creating savings or, in other words, a financial cushion.
Home budget and expenses
Contrary to popular belief, home budgeting and writing down expenses are not the same. Listing expenses, we document all financial operations from the past – we collect receipts, invoices, write down any irregular expenses, such as going on holidays or car repairs. And although this method allows us to know the real costs of our maintenance, it does not have such causative power to show us how much we can (or should) save. So we learn what we spent the money on, but we do not know, except for the option of radical cuts “on everything”, how to improve our material situation.
Writing down expenses is a partial solution to the problem of a lack of control over your own finances – you are completely out of luck keeping a household budget. Thanks to it, we have a real impact on the future, because we actively plan all expenses – both fixed and irregular costs. We can see in black and white whether we can afford a purchase in a given week / month / year, so we have total control over home finances.
The great advantage of a home budget is also the fact that it shows us our savings potential on an ongoing basis. It provides a good base for using all banking products that help to increase capital: savings accounts and deposits, investment funds as well as shares and bonds. According to the same principle according to which the most prosperous enterprises operate.
House budget 2019 – rules for creating
The choice of how to create a home budget depends on our individual preferences – we can do it on a piece of paper or use the aforementioned spreadsheets and applications. Before we move on to Exel’s role in supervising our revenues and expenses, let’s stop for a moment with this more traditional form.
Manual budgeting is governed by almost the same rights as the others, because it is not the form and tools that are most important here, but the purpose and effect. If we sat at the table with a card and a pen – the goal was also achieved. The most important thing is that we don’t unnecessarily complicate matters, so it’s worth using only the necessary, simple categories of expenses.
The whole is to be so clear and transparent that we can easily explain it to the child, especially if our home budget includes a family of several, in which everyone should have knowledge of how to manage finances.