Miyerkules, Mayo 28, 2014

BUDGETING

50 Pesos bill (for one person per day (3 meals))

Breakfast - bread and coffee
Lunch - rice with fish and soup
Dinner - rice with fish and soup

200 Pesos bill (for 4-5 person in a day (4-5 meals))

Breakfast - bread and coffee
Lunch - rice with fish and soup or tortang talong
Dinner - rice with fish and soup or tortang talong
(With snacks for the 25 Pesos remaining)

Budgeting

A budget is a plan for your future income and expenditures that you can use as a guideline for spending and saving. The key to spending within your means is to know your expenses and to spend less than you make. A good monthly budget can help ensure you pay your bills on time, have funds to cover unexpected emergencies, and reach your financial goals.

Most of the information you need is already at your fingertips. To create or rework your budget, follow the simple steps outlined below to get a clear picture of your monthly finances.

1. Add Up Your Income
To set a monthly budget, you first need to determine how much income you have. Make sure you include all sources of income such as salaries, interest, pension and any other income–including a spouse's income if you're married.

If you get a salary, be sure to use your take-home pay rather than your gross pay. Taxes are usually taken out automatically, but if they're not, remember to include them as another expense. If you receive money from somewhere not listed, enter the source along with the amount under "other income."

2. Estimate Expenses

The best way to do this is to keep track of how much you spend for one month. Fixed expenses are those that generally do not change from month to month, such as rent and insurance payments. Flexible expenses are those that do change from month to month, such as food or entertainment. If some of your expenses for one or more categories change significantly each month, take a three-month average for your total.

3. Figure out The Difference

Once you've totaled up your monthly income and your monthly expenses, subtract the expense total from the income total to get the difference. A positive number indicates that you're spending less than you earn--congratulations. A negative number indicates that your expenses are greater than your income. This means you will need to trim your expenses in order to begin living within your means.

Well done–you've created a budget. The next step is to track your budget over time to make sure you're sticking to it. If you find you aren't able to follow your budget successfully, it may mean that your plan isn't flexible enough. It can take revisiting your budget a few times to find the balance that works for you.

Budget in Business Sense

Budgeting in a business sense is the planned allocation of available funds to each department within a company. Budgeting allows executives to control overspending in less productive areas and put more company assets into areas which generate significant income or good public relations. Budgeting is usually handled during meetings with accountants, financial experts and representatives from each department affected by the budgeting.

In a personal financing sense, budgeting can mean estimating monthly living expenses based on previous bills and wages. If your monthly income is a steady 18.450 Pesos, for example, you can subtract all of your known monthly bills from that figure even before they arrive. Some bills can be estimated and subtracted from the original income figure. The remaining balance after fixed expenses now becomes your household budget. Instead of assigning Peso amounts for sundries such as groceries, entertainment, gas and clothing, budgeting allows you to use percentages instead.

The key to successful budgeting is both flexibility and inflexibility. Certain expenses are fixed, so payment of those bills should be an inflexible element. Nothing is more important than paying those particular bills in full. In business, departments need to know the absolute ceiling on spending. Budgeting works best when very few exceptions are made to the upper limits. The idea of fiscal responsibility is to form a workable budget and stick to it as best as possible.

Budgeting also requires an element of flexibility. It isn't always possible to assign a fixed Peso amount on a project in January and expect the budget to remain stable in July. There are always unexpected events which can drastically change the priorities of a company or an individual. Without flexible budgeting, money allocated for one purpose could not be reallocated during a fiscal emergency. An unexpected drop in sales revenue in March can affect the budgeting plans in November, so accountants and financial officers need to adjust their figures regularly.

When economic times are good, many people become lax about personal budgeting. As long as there is more money coming in than going out, all is well. But those who learn to establish a workable budget and keep within it during the lean times often survive major financial crises better than those who don't. Financial discipline can spell the difference between weathering the storm and declaring bankruptcy.

Budgeting 101
Everything You Need to Know About Budgeting

Budgeting lies at the foundation of every financial plan. It doesn’t matter if you’re living paycheck to paycheck or earning six-figures a year, you need to know where your money is going if you want to have a handle on your finances. Unlike what you might believe, budgeting isn’t all about restricting what you spend money on and cutting out all the fun in your life. It’s really about understanding how much money you have, where it goes, and then planning how to best allocate those funds. Here’s everything you need to help you create and maintain a budget.

1. Budgeting Basics

Do you know why a budget is so important? On the surface it seems like creating a budget is just a tedious financial exercise, especially if you feel your finances are already in good order. But you might be surprised at just how valuable a budget can be. A good budget can help keep your spending on track and even uncover some hidden cash flow problems that might free up even more money to put toward your other financial goals.

2. How to Create a Budget

The hardest part of creating a budget is sitting down and actually creating one. It’s like staring at a blank piece of paper when you need to write something and that first step seems like a massive hurdle.

3. Traits for Budgeting Success

Once you’re taken the time to create a budget, now it’s time to make sure you follow it. Budgeting can be like going on a diet—you start with good intentions, but after a few weeks or months you drift away from your plan. Don’t let that happen to you.

4. Basic Budget Worksheet

If you’re having difficulty coming up with all of the various expense categories for your budget, create a budget worksheet that can help you organize everything. This worksheet has the most common expenses and can help you keep track of everything in an orderly fashion.

5. How Overspending Breaks Your Budget

The main reason to create a budget is to help you keep your finances under control by keeping track of how much money you’re spending and where it goes. When you begin to stray from your budget it’s usually because of spending too much money somewhere. But if you have a budget that tells you exactly how much you’re supposed to spend, why is it so easy to overspend? There are a number of reasons we overspend, so when you understand what causes overspending, you can help put a stop to it and keep your budget on track.

6. Try Using Cash to Keep Spending Under Control

Swiping plastic has become incredibly easy. With both credit cards and debit cards, we can be in and out with a purchase in a matter of seconds. Unfortunately, this convenience comes at a cost. By using plastic we can begin to lose track of how much money is actually being spent. Sure, two Thousand here, 4 Thousand there, it doesn’t seem like much at the time of purchase, but if you aren’t careful they can really add up and bust your budget. One trick to help keep your daily spending under control is to use cash instead of your credit or debit cards. It might not be as fast, but it helps you visualize just how much money you’re actually spending.


Planning
The 25% Rule to Budgeting

For most people, balancing personal budgets is a tedious and time-consuming process. These days, though, the task has become even more challenging.


Start by dividing your before-tax income into four equal parts and grouping the daunting list of expenses your paycheck needs to cover into four categories: taxes, housing (rent and/or mortgage), debts (excluding mortgage payments) and living expenses.

The First 25%: Taxes
Face it, the money you earn is going to be taxed.

Between the various federal and local assessments (including Social Security and Medicare), figure on a bill that could total 25% of pretax income for moderate earners, particularly when payroll deductions for company-sponsored healthcare benefits and retirement contributions are taken into account.

The Second 25%: Housing
Whether you own or rent, limit your monthly payments to no more than 25% of your pretax monthly salary. In other words, figure one week of salary to one month of rent or mortgage payment.

The Third 25%: Debts
It’s also wise to limit your monthly loan payments to no more than one-quarter of your pretax monthly salary as well.

Speaking as a lender, the closer to 30% your total debt obligations are, the less likely you’ll be able to find a creditor willing to say yes to more.

The Last 25%: Living Expenses
If the first one-fourth of your pretax salary is consumed by taxes, the second pays the rent and the third keeps your lenders at bay, the last 25% will have to take care of everything else, including an emergency savings stash.

Ideally, that should total no fewer than six months’ worth of rent, debt and living costs.

Another way!
Budgeting 101

Learn how to create a paper-and-pencil budget. Discover how you can plan for expenses that pop up occasionally -- like once a year, once a decade or once-in-a-lifetime.

What's a Want and What's a Need?

One of the toughest aspects of budgeting and financial planning is distinguishing "wants" from "needs." Is home internet a want or a need? What about pet-related supplies?

Even within spending categories, the wants vs. needs line is fuzzy. "Groceries" seems like a need, until you start scrutinizing the receipt. Then you'll see that bread is a need but cookies are a want.

How can you distinguish between wants and needs? And how much of your income should be spend on wants vs. needs? Learn here.

How to Prioritize Your Budget

Budgeting for Big-Picture Thinkers

You're not a detail-oriented type of person. You don't like the idea of having a strict, line-itemed budget. You get a headache when you look at budgeting worksheets that ask you to break down your spending into dozens of categories. How can you effectively manage a budget without creating a line-itemed, detail-oriented list? Here are some budgeting tips for people who tend to be big-picture thinkers.


10 steps to making a financial budget

1. Budgets are a necessary evil.
They're the only practical way to get a grip on your spending - and to make sure your money is being used the way you want it to be used.

2. Creating a budget generally requires three steps.
- Identify how you're spending money now.
- Evaluate your current spending and set goals that take into account your long-term financial objectives.
- Track your spending to make sure it stays within those guidelines.

3. Use software to save grief.
If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.

4. Don't drive yourself nuts.
One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.

5. Watch out for cash leakage.
If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.

6. Spending beyond your limits is dangerous.
But if you do, you've got plenty of company. Government figures show that many households with total income of 50,000 Pesos or less are spending more than they bring in. This doesn't make you an automatic candidate for bankruptcy - but it's definitely a sign you need to make some serious spending cuts.

7. Beware of luxuries dressed up as necessities.
If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.

8. Tithe yourself.
Aim to spend no more than 90% of your income. That way, you'll have the other 10% left to save for your big-picture items.

9. Don't count on windfalls.
When projecting the amount of money you can live on, don't include pesos that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.

10. Beware of spending creep.
As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.

Setting realistic financial budgets

Most people avoid creating a financial budget and fewer still stick to one. But it doesn't have to be painful.

If you're the type of person who always has plenty of cash, knows exactly where every coin goes and never has trouble paying bills, skip this chapter. You're either too rich or too smart to need it.

For the rest of us, unfortunately, making - and sticking to - a budget is the essential tool for ensuring that our money gets used the way we need it to. Even if you're in the happy situation of having plenty of income, the homework involved in drawing up a budget can be instructive, since you may find that you are spending more than you wish on items like DVDs, electronic gadgetry or restaurant meals.

Drawing up a budget is usually pure drudgery enlivened only by the reality of staring your foolish spending habits in the face. Why do you have a luxury sound system if neither you nor your spouse listens to it? In fact, one of the chief impediments to budgeting is that most people would rather not know how they really use their money.

It's bad enough to learn this kind of information on your own. It's even worse when a spouse or significant other finds out, since it usually confirms his or her worst fears - and provides new ammunition for future "discussions."

Take heart. Any spending mistakes you're making are probably common and not impossible to kick. Moreover, the bulk of budgeting's pains are at the beginning.

After you have a budget in place - and you've fine-tuned it with a couple of months of actual spending - tracking your expenditures becomes almost automatic.

If your boss at work were to ask you for an analysis of the department's spending, you'd figure it out quickly enough. Budgeting your household should be approached in the same businesslike fashion. A variety of electronic tools can make the process easier.

Remember!

A budget is one of your best tools for reaching your goals – whatever your age or stage in life. It’s a plan of what money you expect to receive and how you expect to spend it.

·         Who should have a budget?
·         How to make a budget
·         Use the money planner
·         Things you need
·         Getting help
·         Tracking your spending
·         Making the most of your income

Who should have a budget?

Tip: A tight budget is harder to stick to. Be realistic.
Everyone can benefit from a budget. It’s not just for people who are having trouble making ends meet.
If you’re spending less than you earn, use your budget to work out how much you can put aside each pay to improve your financial position. We call this ‘paying yourself first’.
If you’re spending more than you earn, use your budget to see where your money is going. Then see if there are any ways you can cut your spending or increase your income.

How to make a budget
Add up how much money is coming into your household (your income), and how much is going out (your spending), then work out the difference.
The result is either money left over (a surplus) or not enough money to cover your spending (a deficit). Aim for a surplus so you have some money to save for your goals or pay off debt faster.

Use the money planner
Making a budget is easy with our money planner.
Once you’ve set your budget you can save it in My Sorted to review later.  You can save more than one budget and even share it with friends and family.

Things you need
Your budget needs to be accurate or it won’t work. Give yourself time to get all the information you’ll need, including:
A record of your day-to-day spending. Keep receipts from your shopping, and gather up bank statements and bills from the last three months. These will show regular expenses like rent, mortgage, hire purchase, credit cards, phone, power and insurance.
A list of annual costs. Think about things you pay for less regularly like vehicle licensing, medical expenses, gifts and holidays.
Your income details. A list of any money you get such as your pay, benefits or allowances, NZ Super or interest earned on savings.
Savings. Details of any regular savings you make.

Getting help
If you need help making a budget, or if you are having trouble making ends meet, contact a budget adviser.

Tracking your spending
Once you’ve set a budget you need to see how it’s working in reality. Keep a spending diary or use an online tool.

Making the most of your income
Budgeting isn’t just about watching your spending. How much you earn also affects whether you have money left over for saving or paying off debt.

Why you need to grow your income
If your income doesn't grow you’ll effectively earn less each year just because of inflation. So when you're planning your finances, don't forget to include goals for growing your income.

Know what you’re worth
Do you know what someone in your position with your experience and skills should be earning? Does your employer?
To find out what you're worth, read the situations vacant in your local paper or check out the online job sites. You could even contact some recruitment agencies to find out what a similar job to yours is currently paying.


Reference:
http://money.cnn.com/magazines/moneymag/money101/lesson2/
http://budgeting.about.com/od/Budgeting_101/u/Budgeting-Basics.htm
http://money.cnn.com/magazines/moneymag/money101/lesson2/index2.htm
https://www.sorted.org.nz/a-z-guides/budgeting

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