If you thought that budgets are only useful to major corporations only, then you are wrong. Budgeting is important at any level from the personal level, small and medium enterprise level to huge companies. Budgeting can also be subdivided into a wide range of categories; thus you will need to have different types of budget templates to make the whole process easier for you. Some of the types of budget that will make you look for budgeting templates include
Monthly household expenditure budget
Home improvement budget
Personal expenditure budget
Among other types of budgets
Download templates for your business at templatewave.com
Reasons for budgeting
Perhaps you have been running a small business for years, or you never prepare even a personal budget, but you feel that you are still fairing well thus you do not see the need of having a budget. Unfortunately, the major reason as to why you think that you are on the right track is because you do not know the facts that are only revealed by a good budget. Here are the major reason as to why you need a budget
Makes you think about money
Concentration and focus are the major, requirements for one to become successful and wealthier. Wealth creation depends on how you manage your money therefore if you do not have control over your money you can end up loosing all you have on unnecessary expenditures.
Major crises involving money is a result of lack of conscious about your money. Sometimes you get into huge debts unknowingly which become huge burdens as time goes by. Most of the individuals who get bankrupt are those who do not have a budget which is a necessary tool for managing finances. However, with a good budget you can spot a red flag in your finances or find ways to make improvements on how you manage your finances thus saving you from getting into trouble.
It helps to measure progress
Many individuals who do not use budgets may view themselves as rich whereas in the real sense they are about to sink into the debt pool. Without a budget, you cannot be able to track your expenses. Most individuals know that they can create wealth by reducing their expenses, but it is difficult to determine which expenses to avoid. With a great budget, you can be able to outline the necessities and spend on them leaving out other unnecessary items thus saving money for better future use.
Helps to plan ahead
Planning is essential to the success of every activity or project. If you are planning on buying a new car, you need to determine how much it will cost and regular maintenance costs such as repairs and insurance. You also need to plan ahead where you will source your money to buy any item or invest in a certain project.
You do not need a sophisticated software that is expensive to acquire to make your simple budget. You can download a budget template online and tailor it to suit your need on the other hand for you to feel fully engaged in making your budget you can use common programs such as Ms Word and Ms Excel to make a personal budget template. Here are simple tips that you should remember when drafting a budget.
Decide to start budgeting
Deciding to make a budget is one of the rare steps that many individuals fail to make. You need to fully understand the type of budget you need since every event requires a unique budget.
Be aware of how much you have
Before you start drafting your budget or filling in the details in the customized template, you need to determine how much you have first. You should check your fixed and current savings, investment accounts and instruments that can be converted to cash. You should also determine any interests or expenses charged to your accounts since it will help you to determine how your net worth
Know how much you make
Some individuals such as those who receive monthly salaries can easily determine how much they make. On the other hand business, people will have to make some calculations to determine their aggregate income. If you have an irregular income, you should consider getting an average of what you make per 6 or 12 months. However, you can consider to be conservative and take your monthly income to be the lowest amount you had earned the previous year.
Determine your expenses
Expenses are crucial items that should be included in every budget. Divide the expenses into related categories so that you can easily analyze them to determine the most important to the list important. You should consider keeping receipts of every utility bill that you pay as a reference in case of any inconveniences.
After filling in the important data in your budget, you should check out for errors. It is also advisable that you have two columns one for historical budget drafted using historical information and current or projected budget. The current budget should be adjusted according to the information you want to change such as the expenses you intend to cut or increased income.
Despite the urge of earning more and spending less you need to be realistic when budgeting otherwise it will not work for you. If you intend to cut expenses, you need to look for those expenses that can be reduced such as avoiding movies to cut entertainment costs, using air conditioners while at home only to save on electricity bill and eating at home to avoid extra food costs. If you want to increase your income you should also be realistic, do not expect your income to double in the coming month at your current working rate.
Pay yourself first
Stick and monitor your budget
Coming up with a budget is only a start but sticking and monitoring your budget is the real deal. If you do not stick to your budget, then there is no need of drafting it. Following a new budget can be hard at first since you might have to change your life a little, but if you have a bigger picture of what you want to achieve then, you will always be motivated to stick to your budget. Therefore, you need to have an enticing reason as to why you need to start budgeting.