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Looking Ahead Via Good Budget Planning
Deciding to make a budget is an important step in taking control over the personal finances that sustain an individual’s daily life, however the process can be confusing to inexperienced budget planners. Fortunately there are a variety of resources available in the community and online to aid in budget planning with tips, budget worksheets and even a budget calculator.
A good idea in the first stages of budget planning is to is spend a some time keeping a journal of expenses, perhaps on a weekly basis. Most people are surprised to find how money is spent each week in small increments that add up, such as fast food, parking, tolls and even a daily cup of coffee. Once a weekly journal of expenses has been kept consistently for a while, then it can be multiplied to see what a rough estimate of expenses would be by month or by quarter.
From there, determinations can be made as to what the financial priorities are and what can be reduced or removed for the time being, or perhaps even lived without permanently. For example, if monthly credit card payments are high, it is possible to have them lowered by contacting the credit card issuers or even have the balance transferred to a credit card with a lower interest rate so that the money paid each month is being applied to the balance and getting paid down.
There are many advantages to planning a budget. A sound budget can help avoid debt or help a person get out of debt, increase savings and even enhance their daily life with the freedom of having extra money for splurges or larger purchase. However, if done incorrectly or if not followed closely, a budget can also have a negative effect on an individual.
The aforementioned credit card can negate a budget entirely, as, rather than keeping income in the places where its needed most, credit cards are sometimes used as additional income and this increases the monthly payment and the budget plan is thrown off-balance. Holidays and vacations can also throw the budget planning offline if planners are not careful to save up for these expenses rather than spend all at one.
Make a Budget Worksheet
A budget worksheet can be very useful in budget planning as it will help organize the information into related categories. A budget worksheet will vary depending on its purpose. There are a number of ways to create a budget worksheet. For example, most computer operating systems come with a program that can aid in the creation of a budget worksheet, such as Microsoft Excel. Also, there are many great budgeting and financial planning tools on the market today. A budget worksheet can be downloaded or printed out online from a number of websites.
It is important to realize that budget planning takes time and that positive results may not necessarily be immediately seen. Budget planning has long term results, however, that can significant improve the quality of life an individual live by providing financial consistency.