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Setting budgets, saving money, and regularly contributing a tiny portion of income to your retirement account can not just help you meet your financial emergencies but also allows you to secure a safe and healthy post-retirement life. It is true that saving money on a regular-basis is a tough job for most millennials as they lack money-management and budgeting awareness. Creating an ideal budget for the month is not an alien job, all that you need to do is to stick to the devised budget the way you have planned or intended it to be.

Money-related issues can cause you a great deal of stress, especially when you have to support your entire family with many mouths to feed. To stay on top of your budget, you first need to have a well thought out brainstorming session for sorting things out like your monthly income, monthly expenses, anticipated saving benchmark and other similar things. Budgeting doesn’t have to be that hard. It all depends on the motivation level of a person; whether or not they truly want to save money for hard times. Setting your monthly saving targets can help you save a significant portion of your money which could further be invested somewhere useful or help in financial emergencies and difficulties.

Look At the Bigger Picture

For ideal budgeting, you need to learn the art of the game first for staying on top of your cash flow. Millennials who are already exposed to various ways of spending money now need to plan sensibly and make a budget wisely or else, they will never be able to save money at all. It doesn’t matter what tool or technique you consider to use for ideal budgeting, as long as you know the significance of making a budget—you are never in the ruins.

Let’s suppose you are using a budget spreadsheet. You will have a better understanding of your finances and where your money is going each month. Also, you will feel more in control of your finances which will ultimately get you one step closer to meeting your financial goals. According to studies, most millennials face financial traumas early in their professional careers because they fail to manage their finances properly. A lack of money-management skills begins with lack of planning and motivation to save money for meeting financial problems. Those who regularly contribute to their retirement, 401k, or IRA account can enjoy their post-working life more than anyone else because they will have the financial security and safety to make the most out of it.

Create a Budget

Creating a budget plan for the month allows you to live comfortably within your means. You need to precisely know your current financial status and how much you can afford to spend in a month. For that, you need to set both short and long-term goals for creating the right plan for ideal saving and budgeting. This indicates that planning and budget forecasting is critically important for creating a successful budgeting plan. According to research, those who have the habit of saving can have a healthy, more stable, and secure future.

Stick With Your Budget Strategy

Once you have a clear picture of the ins and outs of your cash flow, you need to refine your budget strategy. Tightening and cutting your extra expenses will help you save more which means that sticking with your budgeting strategy and plan is ideal in every sense. First things first, always pay your debt. After that, you need to set your priorities. There are certain unavoidable expenses like utility and household bills which cannot be avoided and that cannot be controlled. However, you can cut back on grocery and shopping bills by limiting your spending habits.

Get Help from a Budgeting Expert

If you are not good at numbers or setting up a proper budget, you can hire the professional services of budgeting experts or planners. From bookkeeping and inspection to planning, they will have the creative vision to provide you a workable monthly budgeting plan.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Bottles of cash with coins isolated on the background.

Budgeting is the procedure of generating a strategy to spend your money.  This expenditure design is called a budget. Producing this expenditure plan permits you to decide in advance whether you will have enough money to do the things you need to do or would like to do. If you don’t have enough money to do everything you would like to do, then you can use a definite formation process to prioritize your spending and focus your money on the things that are most important to you.

Since budgeting allows you to create an expenditure plan for your money, it guarantees that you will always have sufficient money for the things you need and the things that are important to you.

Whether or not you use a budget worksheet, you most certainly need some kind of technique to determine where your money is going each month. The trick is to figure out a way to track your finances that works for you. This step-by-step guide can help you create and develop a realistic savings plan.

Phase 1: Note your Net Earnings

The first and foremost stage in generating a budget is to categorize the quantity of money you have coming in. Keep in mind, though, that it’s easy to miscalculate what you can afford if you think of your total income as what you have to spend. Remember to subtract the deductions for taxes.  Your final take-home salary is called net income and that is the figure you should use when creating a budget.

Phase 2: Track your Expenses

It’s imperative to keep track of and classify your expenditure so you know where you can make adjustments. Performing this task will definitely help you to detect what you are spending the most money on and where it might be easiest to cut back. Initiate this by listing all of your fixed costs. These are fixed monthly bills such as rent or mortgage, utilities or car payments. It’s improbable you’ll be able to cut back on these but knowing how much of your “once-a-month” income they take up can be useful.

Next is to list your entire variable expenses—those that may change from month to month such as groceries, gas and entertainment. This is a zone where you might find chances to cut back. Credit card and bank statements are a good place to start since they habitually enumerate or categorize your monthly expenditures.

Phase 3: Set your Objectives

Before you start selecting through the information you’ve trailed, make a list of all the financial goals you want to achieve in the short and long term. Short-term goals should take no longer than a year to achieve. Long-term goals may take years to reach.

Short-term (1–3 years)

  • Emergency trust
  • Trip
  • Down payment for a vehicle

Long-term (4+ years)

  • Retirement
  • Your child’s schooling
  • Down payment on a home or a remodeling project

Phase 4: Create a Strategy/Plan

Use the variable and fixed expenditures you assembled to help you get a sense of what you’ll spend in the coming months. With your fixed expenses, you can foresee accurately how much you’ll need to budget for. Use your previous spending habits as a guide when trying to forecast your variable expenses. You might choose to break down your expenditures even further between things you need to have and things you want to have.

Phase 5: Regulate your habits if needed

Once you’ve completed all of this, you have what you need to initiate your budget. Having documented your income and spending, you can start to see where you have money left over or where you can cut back so that you have money to put toward your goals.

Phase 6: Keep Checking In

It’s important that you analyze your budget on a regular basis to be sure you are staying on track. Few essentials of your budget are set in stone. You may get a promotion, your expenditures may increase, or you may have reached your goal and want to plan for a new one.  There are so many variables that require flexibility and focus.

Conclusion

Before starting a budget process, planning must be done which clearly defines your objectives and goals.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

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What is Personal Budgeting?

Budgeting is not only important for businesses, it has equal importance in an individual’s personal life. Personal budgeting is a method of monitoring and controlling your finances. This helps in monitoring personal finances and managing them accordingly. At times, we are so far away from having a budget that we end up broke within a week of being paid. This does not only leave you stressed out but it even affects your professional life. You either feel like you are not paid enough or there is no use in getting paid as you eventually end up with nothing within a week. Working and being broke leaves a drastically negative impact on an individual’s mind. Hence, it is important for a person to monitor their financial spending, analyze the problematic areas, and design a budget to improvise their financial position.

Assess your Current Financial Position

It becomes frustrating when you know that you are working on a low salary and your expenses carry the weight of a mountain. Low-income budgeting seems hard at an initial level. However, if you start small, you will be able to figure out your budget plan more effectively. 


Categorize Your Expenses

The first and best way to budget is to monitor your current lifestyle. Observe your spending habits and monitor your current financial position. Before making any budget quota, you need to list all of your expenses in the following categories.

Debt

Your long-term expenses are things such as student loans, car loans, unpaid bills, credit card balances and so one. Writing them down will give you a shockingly realistic yet clear picture. Don’t worry, they are not impossible. 

Monthly Bills that are Fixed Expenses

Monthly bills are something that you cannot avoid, they are things that you have to pay. However, listing them gives you a clear snapshot and you can even reduce them to a limited extent. These expenses include: rent, utility bills, cell phone plans, gas, and food bills.

All the Variable Expenses that you can Balance

Variable expenses are all of the leisure or emergency expenses that do not occur every month such as buying new clothes, dining out, buying new gadgets, getting your car fixed, and other fixtures and expenses that can occur at your residence. You cannot simply eliminate all of these expenses, however, you can manage a few of them and even look at which expenses are repeating quite often.

Identify Your Problem Spending Areas

When you are done listing all expenses, you will be better able to pick out the problematic areas that are straying you away from your budget every month. This problem could even highlight the areas that need your immediate attention. For example, if your car is asking your monetary attention every month, that means you need to get your car fixed properly once and for all before it breaks down completely.


Making a Budget

Designing a budget is not difficult, unless you don’t manage your steps carefully. Designing it step by step is very important as it will help you in designing a practical and applicable budget for your personal expenses. 

Step 1: List all of your liabilities and plan your gradual repayment method.

Once you have listed your liabilities, you are required to design your payback method. You should not overburden yourself by paying all of your liabilities together. Going for a crash repayment will leave you dissatisfied and you could end up adding more loads.

Step 2: List all of your necessary expenses.

Step 3: Prioritize your money goals.

Step 4: Cut your unnecessary expenses. Now, this is the most difficult part of it all. You might feel like it is practically impossible to cut down as every bill you are paying is a basic necessity. However, once you have crossed the monitoring step and all of the steps of budgeting, you will be able to clearly figure out the failure in your current spending methods.

Step 5: Be Frugal.


Tips to Create a Budget and Save Money without Going Broke

  • Be realistic
  • Always record every transaction
  • Bookkeeping
  • Control your spending
  • Don’t cut out all the fun
  • Take advantages of all the upcoming opportunities
  • Always keep on updating your budget as once you are done with repaying one of your debts, you might have some free cash to rearrange in order to pay another
  • Always keep emergency funds
  • It is best to plan your remaining cash into percentages


What are the Budgeting Benefits?

  •  You can focus on your desired money goals
  • You will be financially stable and organized within a few months
  • It will give you control over your money
  • You can arrange your expenses and spending
  • You will have extra cash in case of an emergency
  • You will have a clear picture of your personal finance
  • You will be able to improve your bad spending habits

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.