A personal budget is a financial plan of an individual’s or household’s income and expenses over a given period, typically one month (www. careeredonline. com). The budgeting process involves estimating future results. In order to prepare this particular budget, the previous month is analyzed. This process helps to understand how and where the money is going all month. The bills that need paid out of a $4. 040. 00 income, were as follows:
Income – $4,040. 00 Taxes Taken Out Before Bring Home Income – $40. 00
Mortgage – not discretionary
Utilities – $190. 00 – some discretion can be applied
Groceries – $400. 00 – some discretion can be applied
Auto Insurance – $120. 00 –not discretionary
Car Payment – $250. 00 – not discretionary
Entertainment – $400. 00 – 100% discretionary
Savings – $168. 00 – preferably not discretionary
Child Care – $360. 00 – not discretionary
Total That Is Left – $1,512. 00 Most of the bills are not discretionary except the entertainment, and this can get cut back on an extreme amount.
Going places and buying things that are not necessary could save money to add to the savings. The budget had no risk after paying the bills; however the money that is left could be put into an investment that is analyzed before investing in it. A personal financial budget can provide guidance for anyone with their financial management, which is a type of a management that deals with the financial matters of the individual’s or household’s income and expenses (www. wikipedia. com). Having a personal financial budget can actually help an individual’s credit score.
If all of the bills are paid on time, then it looks good to the credit bureau. When going to purchase something on credit, a business will look to find if all the accounts in a person’s name are paid on time and rate your credit to see if the score is high enough. The best point of this budget is the balance did not come out in the negative, so from here on out the savings needs to be the focus. After finding out just how much can be saved, then investing in a particular thing could benefit and contribute to the income that is coming in now.
Strategic planning is also an important part of the budget process. Strategic planning can provide information regarding internal and external economic conditions, investigating potential investments that may be beneficial, and can give long-term goals for financial management (www. assets130000. pdf). Setting goals, being disciplined, and learning to budget your finances, can help to reach your financial goals. References www. careeredonline. com www. wikipedia. com www. assests130000. pdf www. ctuonline/courses/pfp10. pdf