mardi 5 avril 2011

Summarize the various considerations pertaining to business and personal budgeting

Véronique Baker

A budget is very important to the well function of a business or a household. A budget is an estimate of available money to be spent.
The first step in budgeting is knowing how much money you have to spend. After evaluating the income after deductions for a year, you can then proceed to the creation of your budget.
The second step is to identify the regular payments that have to be made from the money available. Whether you like it or not, the payments are the most important and have to be made regularly.
If your monthly income is lower than your total of monthly payments, you have a problem, therefore; you must lower your payments or get rid of some of them.
The third step is to determine how much money is left to buy anything else you might want.
Total Income Total payments = Money you have left for clothing, entertainment, etc.
After having determined how much money is left for regular expenses, the fourth step is to choose wisely where you want to spend that money.
The fifth step is to draw up your final monthly or annual budget.
Ex.
Monthly Income                                                     $   2000
Expenses
             Rent                                                                 $ 800
            Car payment                                                    $ 300
Telephone                                                         $ 25
Visa paymen                                                     $ 100
Gasoline                                                           $ 100
Food                                                                  $ 160
Savings                                                             $ 150
Entertainment                                                  $ 100
Clothing                                                            $ 265
Total Expenses                                                         $   2000

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