This is what Dwight D. Eisenhower said when he was a general: “It’s not the plan that counts, it’s the planning.” What he meant was that the act of planning and budgeting themselves are worthwhile in themselves. Budgeting supports you to understand what you are doing and why you are doing it. The particular plan you have decided to go along with may have changed or replaced in favor of a better one, but using knowledge that works well with working out a plan will always be to your advantage.
In this time of inflation, which includes changing interest rates and having wide-ranging opportunities for saving and investing, budgeting money has caught the eyes of people everywhere. Those who did not spend time thinking about the subject previously are now paying for the advice of professional financial planners. There are so many paths to take on the financial landscape, and not all of them lead where people may hope. However, there are some basic facts that can help them use good budgeting.
Planning
One good way in managing the family’s money is planning. You set the goals you want to achieve and get the things you want your family to have. You get the facts you need to learn how much you will need to save, spend, and invest. You also need to know how to make use of credit, the available services, and the potential pitfalls.
Keeping receipts
Good record-keeping is beneficial. You must obtain and keep receipts for important items and make note of important cash outlays. To do this, you need to figure out a way to keep records that suit you. If you are comfortable using a ledger book with neatly-written entries, use it. On the other hand, a shoe box would be just right for storing records on separate pieces of paper. Be sure you accurately label on each sales slip or receipt. Include gifts to charity, sales tax, interest expense items and all other items you would not find in your checkbook.
Calculating expenses
Now it is time to work up a budget based on your annual salary and how much you should reasonably spend. Before drawing up a budget, get your family to keep an informal record of expenses for a month. Estimate how much you spend on an annual event, like Christmas or a vacation, dividing the expenses by twelve. Be sure you take into account all other outlays that appear during the year, such as quarterly tax payments.
Finally, summarize all your income during the year, including interest payments from your bank and dividends on life insurance. For safe keeping, write them in a notebook. By having this information on inflow and outage, you will maintain the basis for your budget.
Budgeting takes a lot of work, and it involves having your family to work as a team. Managing the family’s money means keeping on the right track and making sure you put it to best use in ways you spend and save it. Once you accurately take good financial steps by budgeting, you should feel stress-free with money, instead of worrying one way or the other.