Budgeting

The Top Five Most Common Budgeting Mistakes

Budgeting has been described as a cornerstone of an organization's financial management foundation. The budget serves as a benchmark against which financial results are measured, and variances from budget can be used to guide management's decision making.

There are a number of common mistakes made by organizations which can reduce the effectiveness of budgeting, and which may prevent the organization from achieving the maximum benefits from this valuable management tool. The most common budgeting mistakes are:

1. Budget is not contained in the accounting system, but is maintained in an Excel spreadsheet. This creates a number of problems, including the difficulty of keeping the budget accounts properly aligned with accounts in the accounting system, the time and effort needed to export data from the accounting system into Excel every month, and to format the variance reports, and the high potential for error due to the manual work involved.
2. Budget is not properly seasonalized. Monthly budgets are often created by dividing the annual budget by twelve, rather than taking into account normal seasonal fluctuations when establishing monthly budgets. This often results in variance explanations that are not very meaningful, such as "variance due to timing".
3. Significant variances from budget are not clearly identified. Most variances may be relatively small and not worthy of management's attention, and these may obscure the more important variances. Variances that are material, for example those that differ more than a certain percentage and/or dollar amount from budget, should be highlighted to bring them to the reader's attention. The level of variance materiality may differ from one organization to another, and should be set appropriately. It is helpful to use both a percent and a fixed dollar threshold in determining the materiality threshold. For example, all variances that are over 10% and over $1000 might be deemed to be material.
4. Variance explanations do not properly identify underlying cause of variance. For example, rather than say that "salaries are higher than budget due to a higher number of employees than planned", it might be more meaningful to explain that "salaries are higher than budget due to hiring additional employees to meet greater than expected demand for services".
5. Budget process is not clearly defined. There should be a financial policy that specifies who is responsible for developing the budget, who is responsible for approving it, and the timeline for this to occur. The budget should be developed, approved and entered into the accounting system before the beginning of the fiscal year.

By avoiding these common mistakes, your organization should achieve greater value from budgets, and ultimately this will enable your management team to make better and more informed decisions.

Budget preparation is not an easy task. It has always been a problem for people who earn plenty of money but still end up spending more than they can afford to.

Money management is necessary for you to know how much money there is to spend and how much should be saved. You need to be able to allot a specific amount of money for different necessities like food, clothing and bills.

This is the reason behind the introduction of online budgeting systems that help you spend within your means. With these kinds of systems available over the Internet, it is now much easier for you to access their functions anytime, anywhere. If you want to know how much you have and where your money is going right away, you can do so without much hassle.

Budgeting systems allow you to track how much money you are actually spending for daily expenditures like transportation and food, the amount which goes to insurance payments, auto maintenance, utility bills and even expenses like eating out and entertainment. The money that goes into your savings account is also accounted for.

This type of money management also allows you to track your credit card expenditures. Now you have control over your spending. The system also helps you eliminate debts and enjoy the money that you earn. By managing your money wisely, you will be able to save up for future investments such as a car or a house.

Budgeting software will help you keep track of everything. Some programs show you the difference between your budget and your actual spending. Others warn you when you go over your budget. The best thing about this software is that you can also adjust your budget to include emergencies, keeping you confident that you will still have money to spare when the need arises.

If you are ready to stop budgeting, then you aren't doing it right.

The truth is that budgeting is something that you make into a habit. If you are doing it correctly, you should keep doing it for the remainder of your life. Budgeting is a way to make your goals a reality. You will always have goals, so you are never finished with your budgeting. Your future will keep coming.

That in mind, you have to remember that budgets are not written in stone. Your budget could change next month. It is basically a way to keep track of the efficiency of your finances. When your income changes, your budget changes. When your needs change, your budget should change. If you find that your budgeting goals are unrealistic, you should change that portion of your budget.

By making the tracking of your budget part of your monthly financial work, you will be able to see if it is working for you or not. If it isn't, you need to make the necessary changes.

One of the first things that new budgeters see is that they have cut their expected spending for food, gasoline and entertainment way too much. It is simply unrealistic to believe you can cut your grocery spending in half over night. Challenge yourself at a slower speed. Aim to spend $20 less than normal this month. Then challenge yourself again next month. Take small steps and let yourself adapt.

Things happen that can throw your budget all over the place. You simply have to keep working at budgeting. I know that if you lose your job or have a medical emergency, the last thing on your mind is your budget. However, it could be the one thing that keeps you feeling as if you are in control of your finances.

Your budget will help you achieve your goals. When you have achieved them, you need to move onto new goals. For example, you have worked hard and are now comfortably retired. Now what? You may want to travel or start a new hobby. Your budgeting will take you into the next stage of your financial life.

Keep in mind that your budget should work towards the future, but remain in the now. In other words, do not spend your money on what you think you will have tomorrow. If you are planning on a raise, don't go out and use your credit card thinking you will pay it off when the raise comes through. You never know what could happen. This is extremely risky. Stay in the right now with your budgeting. When your income actually changes, reassess your budgeting accordingly.

Budgeting gives you back the control of your money. Once you are really successful with your budgeting, you will want to continue to challenge yourself. It is easy to become comfortable and let the budgeting lapse. But remember, if you want to remain financially successful, you can never finish your budget. Keep working towards your goals by using your budget wisely.

Creating a budget is essential for any household in order to insure that you have enough money to cover your expenses, organize your debt, and help you build enough for a reserve fund. Yet, despite the clear advantages of making and following a budget, the majority of people never bother to create one. Some don't do it simply because they feel too constrained by pre-planning their purchases while just don't know where to begin. Indeed, no matter what your reasons are, budgeting is a daunting task for anyone. Fortunately, there are many home budget software applications that can help guide you past the difficulties that so many new budget makers encounter. Here are a couple of tips that can help you choose the best application for your needs.

Those new to creating budgets will often find the task to be daunting and it's important to obtain software that helps you plan your expenses relative to your income. Most budgeting applications simply allow users to input their income, expenses, and so forth and leave the individual to come up with optimal proportions. This is a sign of poor software to use. How much do you want to pay down your credit card debt? How much should you be saving? Look for budgeting software that helps guide you with these questions. A good home budget software program will help you save additional money and optimize the amount of debt that you pay down.

Secondly, although this may seem obvious, look for well thought-out, intuitive software. Budgets can be made in something as simple as a spreadsheet, yet doing this results in a lot of unnecessary work. The whole point of purchasing the home budget software is to avoid all that labor. Look for an application that has wizards and allows you to import bank, credit card, and mortgage statements. Also look for a program that includes a comprehensive tutorial with a fair amount of budgeting advice. While you may not feel like you need a tutorial, an inclusion of one is typically indicative of well-made software. After all, it doesn't take a lot of code to give one the opportunity to enter some data and show a graph - it takes much more knowledge to create software that actually helps you optimize your finances and find better ways to use your money.

Home budget software is essential if you want to improve your financial situation. It doesn't matter if you're wealthy or poor, budgeting is vital so that you know exactly how your money is being spent and if there are any foreseeable troubles coming in the horizon. All too often, individuals who fail to budget have an unexpected expense that winds up getting them into a debt spiral. Look for software that promises to actually help you with the process and also make sure that the application you're considering buying actually includes wizards and other tools to help you analyze your finances. It's not worth your time or money to buy a "fancier spreadsheet". Ensure that the home budget software application you're considering actually helps you enter and analyze your data.

In over 25 years as a senior executive in a Fortune 500 corporation, I participated in all aspects of the budgeting process in departments, divisions, different countries and cultures, and separate corporate entities. I developed, discussed, reviewed, approved, executed, and quarterly and yearly, assessed performance against budgets.

Many folks had difficulty with budgeting, which I wrote about previously. I referred to their challenges as the DAVID effect: denial of the need; wanting to escape accountability; adopting the victim approach of blaming others for their performance; ignorant, not wanting to learn; and claiming a lack of discipline to stick to the task.

Once folks overcame their difficulties, still, they had problems sticking to the budget. Over the years, I found three significant reasons for this, which I regarded as the LIP budgeting way to be avoided.

1. Lack of commitment
2. Inflexible budgets
3. Performance not linked to outcome

Lack of Commitment

People understood the need to budget. They knew the budget was their road map guiding them to goals using scarce corporate resources. They knew when they stayed with the process; they saw positive results. Even so, they found it difficult to commit to the journey.

Several reasons caused their lack of commitment, but two predominated. First, people felt excluded from key parts of the budgeting process, such as discussing assumptions, and setting specific interim targets. Second, they felt insufficiently empowered to act when they saw areas needing attention.

When we dealt with those two conditions, folks owned the process, stayed with it, and we got results.

Inflexible Budgets

We had to teach managers how to manage performance and work with a budget. We stressed that we would never revise the budget to cover up poor, sub optimal performance. We wanted to ensure they used resources effectively to benefit the company from unforeseen, but available opportunities. Sometimes they had to trade off overspending one area to optimize and create value in another.

This was a tough lesson to convey. However, in the budgeting process, we built "what-if" scenarios and prioritized them according to strategic importance. When conditions changed during the budget period, managers had action plans available that they could implement quickly by diverting resources. For example, managers prepared action plans to use two essential complimentary raw materials under different price scenarios. If the price of one spiked, or plummeted, department managers, had available scenarios to allow them to cut the quantity of one and increase the other to maximize value creation in the period.

The most difficult idea to communicate was that a flexible budget had just one meaning. We changed the budget when conditions changed, to seize opportunities to create value; only then was the budget variable. Once managers bought this, their performance shot up.

Performance Not Linked To Budgets

This was complex. Financial budgets were only one part of the manager's performance targets. We needed to ensure that the link between compensation and budget results was not so exclusive that it encouraged games with the numbers. Customer service, product quality, morale, and other softer measures were vital. Still, we argued that these soft measures, ultimately, drove overall budgetary performance.

The challenge was how to use the financial budget target as the critical performance measure over time, while stressing the importance of non monetary targets. We did this by regular, simple, monthly and quarterly reviews, and routine individual performance appraisal sessions. A key part of this review process was managing by "walking about." We visited locations regularly, spoke with different organizational levels, toured operations, and made ourselves accessible. It worked!

Summary

A successful business needs a strong flexible budget culture. However, the business must stress that the budget is not a straitjacket, but a road map to a destination. On this journey, when conditions change, managers must be flexible and take full advantage of changed circumstances. Therefore, businesses must train, develop, empower, and reward managers to seize opportunities; even those which might cause over spending today to create significant value tomorrow.

Introduction

The average per household debt in the U.S., not counting mortgage debt, is about $14,500. A typical credit card purchase ends up costing 112 percent more than if cash were used. A $1,000 charge on an average credit card will take almost 22 years to pay, and will cost more than $2,300 in interest ($3,300 total) -- if only 2 percent minimum payments are made. There are many families that, if faced with a sudden $1000 bill, would find it difficult to come up with the cash to pay for it.

This report will explain the hows and whys of setting up a budget that you can live with, putting together a structured savings plan and reducing your debt. I call my household budget "The Marriage Saver" because I honestly believe that it went a long way towards saving my marriage. Before budgeting our money, we would deposit our paychecks into our checking or savings account and buy what we needed or wanted. We knew that at the end of every month, we would have to pay the rent, so we kept enough in the account to take care of that. But when (notice I said when and not if) an unexpected car repair or appliance breakdown came up, we always ended up fighting about where the money would come from. After setting up the budget (and this is without any increase in our family income) the emergency money was always there. By now, some readers are going to be thinking that they can't afford to set up and maintain a budget. The fact is that you can't afford NOT to. The principles that will be explained here apply whether your family income is $10,000 or $100,000.

Setting Up A Budget

A budget is nothing more than a way of setting aside money now for expenses in the future. This can be accomplished with a loose-leaf notebook, or if you have a computer, either a spreadsheet program or a commercially available program. Plan on spending 1 to 2 hours per week maintaining your budget.

The first step is to break down all of your spending into categories. Make a list of what your money is spent on. Go through your checkbook and look at old receipts for ideas. Remember, you are not interested in what store you made your purchase in or where you bought your last hamburger. You are interested in breaking your spending down into categories. Great care should be taken to get a complete list as these are the categories that you will be saving for. If you miss one, an unexpected bill will result! Some sample categories are listed below:

Automobile Payments
Automobile Insurance
Food
Gasoline
Entertainment
Gifts
Hair care
Home Improvement
Homeowners / Renters Insurance
Property Taxes
Life Insurance
Medical
Misc. Household Expenses
Mortgage / Rent
Savings
Telephone
Utilities (Gas & Electric)
Vacation
Water
Clothing
Auto Repair
Fuel Oil
Dentist

Once you have your categories set up, you need to assign a dollar value to each. This is the amount that you will put away each week for every expense. Note that some of your expenses are paid weekly, such as food; some monthly, such as your rent or mortgage, and some quarterly, such as water bills and property taxes. With each, you will calculate the expense at a weekly rate. The weekly expenses are easy. For example, weekly food purchases can be calculated by looking through your checkbook and getting an average cost. This will become your food budget. Monthly expenses, such as rent and auto payments are a bit more work. Because some months have four weeks and some have five, you will need to use the following calculation: Take your monthly expense, multiply it times 12 (the number of months in a year) and then divide that number by 52 (the number of weeks in a month). Here's an example. Say your mortgage payment is $1200.00 per month. Multiply 1200 times 12 and you get 14,400. Divide that by 52 and you get $276.92. Round this up to the nearest dollar, which would be $277.00. This would be your budgeted amount for your mortgage. Note that on five week months, you will have some money left over. It's not really left over, though, so don't take the family out to dinner with it. It will be used during the four week months. Do these computations on every monthly expense that you have. On your quarterly bills, you will do a similar exercise. Take your quarterly expense and multiply it by 4 (the number of quarters in a year) then divide that by 52 (the number of weeks in a month.) Let's take a quarterly water bill as an example. Say your water bill is $110.00 per quarter. Multiply that by 4 to get a yearly expense of $440. Then divide that number by 52, and your weekly budgeted amount, rounded up to the nearest dollar is $9.00.

Notice in the sample categories listed above that "Vacation" and "Gifts" are listed. There is one big advantage of budgeting these yourself, as opposed to Vacation and Christmas Clubs at your local bank. With the clubs, you can't always get to your money when you need it. Vacation clubs mature in May, while Christmas clubs mature in October. That's fine until you want to take a vacation in December or you see a gift that you would like to buy for someone and it's only July. By budgeting for these items yourself, you have the control over your money.

A similar situation occurs with budgets to heat your house in the winter. Whether you use gas, oil or electricity, most fuel suppliers and utility companies allow you to set up a budget with them. They calculate your cost to heat the house over the winter months and divide that up over the entire year. This is exactly the same process that we went through calculating weekly budget amounts. You then pay the gas or oil company a fixed amount every month. That's great, except that for eight or nine months out of the year, they have your money, and are earning interest from it. By you budgeting your heating bills yourself, you earn the interest. Even if it only comes out to a few dollars in interest over the year, it's better in your pocket than someone elses.

For those who purchased their car (new or used) rather than leasing it, your loan may run for between three and five years. Once this is paid up, don't stop budgeting for it. Continue putting away the same weekly amount. This way, when it comes time to purchase another car, you will already have a sizable amount of money saved towards a down payment. Remember that the larger the down payment, the lower the amount that you will be financing. Two things are actually happening here. The first is that the money that you are saving towards your next car is earning you interest. That's free money. The second is that by reducing the amount of money that you will be financing on your next car, you are cutting the amount of interest that you will be paying towards it. More free money!

One of the categories listed is Entertainment. This is an important one. Just as all work and no play makes you a dull person, you can budget yourself out of all of your fun. Set aside a little bit each week to go out to dinner, movies etc.

Pay Yourself First

A very common practice is to make the decision to pay all of your bills first, then take what ever is left over and put that towards your long-term savings. The reality is that more often than not, there is nothing left over! By using the "Pay Yourself First" method, you incorporate a fixed amount into your budget to go towards savings every week. It's very important that you don't try to over-extend yourself here. If you budget an unrealistically high amount for savings, you will constantly be short on the rest of your budget, and will "borrow" from your savings. Borrowed money from your savings will never be repaid! It is better to set a realistic, affordable budgeted amount that you can afford, even if it's only fifty dollars a month (that's twelve dollars a week). The idea here is consistency. As your savings grows, you will want to transfer it out of your passbook savings or checking account into something that has a higher interest rate. CD's, mutual funds, stocks and bonds are some choices.

An easy way of adding to your savings is with pocket change. We all come home with some coins in our pockets, but who knows where that change ends up. Get an empty 2 litre plastic soda bottle and cut a small slot in the top. At the end of each day, deposit your change into the bottle. Don't break it open till it's full. A full 2 litre bottle can hold more than $300 worth of change. That's a nice weekend getaway, a new TV or whatever you want.

Conclusion

There's no big mystery to setting up and maintaining a budget. It's easier than you think, and doesn't take a lot of time. Give it a try. You have nothing to lose, and a whole lot to gain.

A budget is an extremely useful tool which can help you control your financial situation. Many people who get into problems with debt or overspending do so at least partly through not fully understanding where their money is going. By using budgeting techniques you can get a clear picture of exactly what you spend your money on, and take action to adjust that balance if it is not what you want to be doing. In other words, it is not about stopping all expenditure, but rather choosing what you spend your money on and making sure you have money free for the things you really want.

Working to a budget really should not mean permanent thrift and misery; it is about understanding and control, and the end result should be that you have more money to spend. The difference an effective budget can make is enormous, and it really is largely about getting a clear understanding of where all your money goes to, so that you can make sure that matches up with the amount you have coming in.

If you buy a coffee once or twice a day, it costs very little each day, so you don't even think about it. However, if you add that up and work out how much that is every month and every year, it becomes a substantial amount of money, which you may well decide you would rather do something else with. If you buy lunch every day at work, would you really rather do that than bring something from home and have an extra holiday each year? It really does make that much difference and most people are making these sort of choices on a daily basis without knowing it.

So understanding that a budget can be a useful thing is a bit of a no-brainer, but then comes the part where many people fall down - doing something about it. Understandably, a lot of people do not get started down the budgeting route simply through a lack of understanding of how to go about it. There are various options you can consider, but in essence what you need to find is a system you can follow that gives you an easy way to keep track of where your money is going. If you are reasonably comfortable with figures and spreadsheets, you can do this completely from scratch. You can download free budget sheets online to get you started.

The problem is that unless you are very determined, it does not take much to be put off following the whole process through and putting in the work that is required to prepare your own budget manually. The alternative is to use some sort of budgeting tool, of which there are many on the market. The reason these are so popular is that they take all the hard work out of budgeting and mean that you only need spend a small amount of time keeping track of your finances. Keeping the process as simple as possible is actually quite an important factor in determining whether people put the budget into action and stick to it or not.

Even with a budgeting tool, you will need to spend some time initially inputting all your financial information so that you can come up with your monthly budget. Once that work is done, however, the all important monitoring and updating is so much easier with a budgeting software tool. Some packages will even pull your online bank statements into the system so that all your financial information is integrated in one place. One of the most useful aspects of a good budget tool should be the reporting function. This is where you are able to really analyse your spending, to show you in a clear and simple way where exactly your money goes, where spending is out of control and which areas require your attention.

Introduction
 
In this modern-day, money management has higher level of importance. Budgeting plays an important role in controlling operations in an efficient and effective way. Basically, budgeting is divided into two different entities namely public entities and private entities. It is important to divide budgeting into classes since the entire budgeting process involves different bodies in the governmental system. The involvement of different bodies is needed for some stages in the budgeting namely preparation, negotiation and approval. Furthermore, it also plays an important role in spending approval after the budget allocation is completed. Compared to the private sector, this budgeting system is more complex.

Traditional budgeting system has given a lot of contributions to the government. However, the methods are considered to be unsuitable as business grows faster. For more than 30 years, government has used many different budgeting approaches such as the Line-item Budgeting, Program Budgeting and PPBS Budgeting. These traditional budgeting methods offer advantages but lately it is found that they fail to meet business demand. Traditional budgeting systems only present little information to decision makers; usually it estimate the forthcoming expenditure based on the previous budgeting plan. With the numerous weaknesses that traditional budgeting offers, organizations consider that these tools are not able to help them achieve goals more effectively.

To help the developing nations restructuring their budgeting and spending process, World Bank has created new model of budgeting system. The new model has triggered public sector to understand and finally adopt new budgeting system.

This new budgeting method emerges to improve the traditional one. This new model evaluates that the former ways of analyzing and utilizing budget figures are not enough. In the traditional method, the budgeting analysis is considered to be very simple. Organizations only build up their long-term projects and break the projects into the estimated annual budget. Then, budget figures are compared with the project results. This method has some drawbacks especially on how to adjust similar budget figures for the upcoming periods.

This new budgeting system approach offers sophistication over the traditional one. To describe how this new method works, the governmental project in enhancing children welfare in a remote area can be the example. For this long-term project, governments have to decide the objectives and activities needed to reach the goal.

To achieve the project goals, the government may make improvement on the schools and send trainers to succeed the educational programs. The long-term projects then broken down into annual budgets that combine monetary figures. When the long-term projects are completed, the traditional method in measuring the success of the project is by calculating on the gap between the budget and the money spent.

The new budgeting approach offers more sophisticated methods but the goals to achieve are also more difficult. The governments should be certain if they had been successful in helping the children in the remote area. Besides, governments should be able to determine the expected cost.
 
Performance-Based Budgeting

The new budgeting system that some nations start to adopt is called Performance-Based Budgeting System. This is a budgeting system that links the funding of public sector organizations to the expected goals. In other words it can be said that performance budgeting system is a way to allocate budget to achieve goals of certain projects. Therefore, they key of this new budgeting system is "result".

This new budgeting system has some purposes. The first purpose is to communicate the expected result of a budget allocation. Meanwhile, the second purpose is to link budget and project results. There are five steps in performance-based budgeting: (1) establish the expected outcomes; (2) select the measurement of project result; (3) define a goal; (4) to provide written account of project result; (5) perform consequences.

This new budgeting system also offers some benefits:

1. It focuses resources toward the most important result. Thus, it increases the effectiveness of government operations.

2. Government would be more accountable in deciding program that affects budget result.

3. Improve the understanding on important issues.
 
Achieving PBB

Performance-based budgeting requires Key Performance Indicators. KPI is a technique used by an organization to evaluate the success of certain projects. To choose the right KPIs, an organization should understand the aspects that are important for them. In some organizations, performance indicator selections are often similar to the techniques that are used to assess the current condition of a business and its main activities.

Performance-based budgeting links the performance indicators established by an organization to resources. This process is almost the same as Corporate Performance Management (CPM) framework in which the project plans are measured. Those two frameworks offer policy similarities that are worth to analyze. Unfortunately, CPM framework doesn't get much attention in the area of performance-based budgeting. The CPM framework technical foundation is actually a great means to explain a better budgeting approach that is addressed for public sector and commercial companies.
 
Performance-Based Budgeting System Challenges

This new budgeting method is considered to be appropriate initiative for all countries. However, countries need to evaluate some aspects before implementing this new budgeting method. It is important to evaluate the governance, human resources and the current situation of public financial management.

The implementation of this budgeting system has just started in some developing countries; one of them is Indonesia. To make the implementation process runs easier, Indonesia can learn the experience of other countries in implementing this budgeting method.

In adopting the new system, there are challenges that Indonesia has to face:

1. The parliament plays an important role in determining budgetary policies and designing the annual budget.

2. Government finds difficulties in measuring performance indicators.

There are more challenges in the process but the good news is that developing nations like Indonesia is starting to reform their budgeting system. Indonesia is in the early stage of implementing this system but several progresses have been made. Currently, this nation has been selected pilot ministries to assist the implementation of this new budget method. New legal framework has been laid and The Directorate General of Budget of the Ministry of Finance of Indonesia has been assigned to succeed the budgeting reform.

Sample wedding budget worksheets are something that most brides and grooms struggle with planning. A budget sheet is a concept that is widely used in the world of business. The purpose of this sheet is to track expenses and allocate the appropriate percentage of funds to each category. Some of the responsibility for a wedding can be:

(a) Accounted for from primarily by the bride's parents

(b) Accounted for from primarily the groom's parents

(c) Shared amongst both sets of parents

(d) Shared amongst the families and the bride and groom

(e) Accounted for entirely by the bride and groom

Worksheet for Budgeting your Wedding

The key to the budgeting is compromise. The bride will usually prefer all the best accessories and dresses where as the groom will be more financially conscious of the whole process. So, they need to meet somewhere in between to accomplish what they both want. A good rule of thumb is to comprise on quantity not quality. The quality of the wedding is what will be remembered by all. It is very possible to have a beautiful classy wedding on a tight budget, just be careful of how many guests are inviting. Having a budgeting sheet is helpful, so you may want to divide the sheet in categories such as the ones below.

Bridesmaid's gifts, Transportation, Stationary - 2% each

Rentals, Miscellaneous - 3% each

Flowers - 10%

Photography - 11%

DJ entertainment and Lighting Design - 10%

Bridal Attire - 12%

Reception - 45%

These figures can be a good starting point for budgeting your wedding. Obviously, nothing is set in stone but if you follow a budget, you should be around the figure you would like to keep the total cost at. The percentage is based on the total cost. So, if you would like to spend $20,000 total on a wedding, $9,000 ($20,000 x 45%) shall be allocated for the reception.

The responsibility of cost for a wedding is stated by tradition. There is no right or wrong way to figure costs. It is a matter of choice and it's something that you should discuss with both sets of parents. More than likely they will incur some of the financial burden. They will also want to be involved in your decision making process.

By now, the concept of a wedding budget sample is a little clearer to you. Let's walk through an example. We will assume that the total budget is $20,000 (which is below the national average for a wedding budget). The percentages above can be changed accordingly to what you would prefer to focus on during the wedding. If the DJ and lighting design are more important, then you can allocate 11% towards the DJ and lighting instead of 10%. This would translate to $2200 ($20,000 x 12%) budget instead of a $2000 ($20,000 x 10%) budget for the DJ. Prioritize the list below as to what is most important to you and then adjust your percentages accordingly.

Number of guests to be invited will influence the type of wedding site (church, synagogue, hotel, club, home) Location of reception venue - church hall, hotel, club, home, banquet hall

Bridal attire - what will the bride wear

Food and beverages - what kind of food and beverage will be served and how will they be served

Flowers - how many flowers and what kinds of flowers

Photographs - which professional company are you going to choose

Music - DJ Entertainment or live music, what about lighting design

Rentals - Would you like a photo booth rental at your reception

Transportation - a limousine, a luxury rental car, friend's new car, or family car

The cost breakdown should be flexible enough to allow for minor changes. It is better to account for changes than wait until the last minute. However, some budgets have the freedom to move around for last minute budgeting. Most vendors understand this, and will give you the option to upgrade or add on a service a month before the wedding. Reputable services require a 50% non-refundable retainer payment in order to reserve your date. Typically, any outstanding balances will be due 2 weeks prior to your big day.

Wedding Budget Planning

Together you and your fiancé can use the ideas and formulas mentioned in this article for a healthy wedding budget. You should keep a close tab on the budgeted amounts, total costs, payments made, and the balance due in each category. Congratulations, and feel free to leave your thoughts and comments with us below!

Anyone that wants to have a secure financial picture for their future knows that budgeting your money is the best way to achieve your financial goals. If you didn't know that, then know you do.

The only way to ever be financially secure is to know where your money is going every month by setting up a personal home budget. But just the mere thought of setting up a personal home budget and budgeting your money makes most families shudder with dread, anxiety and fear.

The typical thought is that budgeting your money is too limiting and that you will not have any money to spend on the "fun things" in life. But the opposite is actually true. When you have a personal budget, you will have better control of your money, you will quit frittering it away on small, insignificant purchases and you will have even more money to spend on the "fun things" in life.

What most people don't stop to think about is that you are just wasting hundreds of dollars every single month on stupid things that don't add any value to your life if you aren't budgeting your money. Have you ever gone to the grocery with just 5 things on your list that might have cost your $15 and instead came out with a basket full of stuff that you spent $50 on? I certainly did before I started budgeting my money more carefully and I'm not doing without anything that I want to have.

Do you want to be able to have more money for the things that you want?
Do you want to have a savings or investment plan for a better future?

The only way to do either of those things is to take stock of your current financial situation and set up a personal home budget. You have to know where you are right now in order to know where you are going in the future. Budgeting your money will allow you to know where your money is going, cut out wasteful spending and save more money every month to put toward achieving your financial goals.

If you have debt, whether it's a little or a lot, budgeting your money will allow you to develop a plan to pay your debt off. As you know, you will never get out of debt if you only pay the minimum balance every month and you will never be able to pay extra if you don't have money left over at the end of the month.

Don't let budgeting your money become an overwhelming task that you think you can never ever accomplish. Everyone can set up a personal budget. It's really not that hard to do.

Proper financial planning is the key to avoiding living from paycheck to paycheck. We are living in trying times, which greater emphasizes the importance of budgeting your money. In order for our economy to come out of the recession before it gets to deep and long, we must start with the individual. By instilling proper financial planning principles into the masses people will start realizing how and what people can do with their money. I see people all the time living from paycheck to paycheck often needing advances because they do not know how to manage their money. A very easy and efficient tool to learn and use is budgeting. Budgeting is ultimately a plan that allows you to allocate your funds anyway you wish. Budgeting allows you to tackle your goals from a financial perspective through awareness. In determining your budget you are deciding how much money goes where so that you can chalk up the rest to savings. Budgeting may get a bad rap for many people perceive being on a budget as being on a financial diet. However this is not true for your budget is customized to the way that you see fit.

There are some common myths and misperceptions about budgeting that are ultimately false and I want to take the time to clear up the air. Setting a budget means that you have is constantly sacrificing. This statement is only as true as people let it be, for every single budget is customized. Therefore a person who is trying to save up for something in a small amount of time, then yes some sacrifice will be involved. However most budgets are put in place to ensure that people are allocating their funds correctly and responsibly. If there is no financial plan that exists people will be much more susceptible to participate in impulse purchasing.

A common myth about budgeting is that it takes up too much time. Proper budgeting methods are not overly complicated or intricate that a 10 year old could compose one. Also, frankly people do not have time to not participate in budgeting. The way that you spend your money decides a lot about the type of life you are living therefore budgeting should be high on your priority list. You will be able to determine significant cost savings by just laying out your expenses versus your revenues. Things that seemed important in the short term now do no look as important.

Another misperception about budgeting is that it can cause a rift in your family. Living on a budget is not a new concept, and maybe at first your family might need some time to get used to it but overtime it will seem normal. A good way to deal with this is determine a budget on a family basis saving up for something fun for the whole family. Getting the family to bond together to achieve a common goal will not only save you money, but it will place importance on what really matters most.

The first step to any kind of family financial peace is the creation of the family budget. With today's go-go-go lifestyle keeping track of income and expenses is a necessity. Too many families get into financial messes simply because they do not have any idea where their money is going until it is gone.

When you first build your family's budget plan you may be met with a certain amount of resistance simply because a lot of people have an aversion to the word "budget". The thing to remember as the builder of the budget that you need to pass along is that this new way of dealing with money is not a set in stone law. A budget is simply a tool that allows you to see where your money is going and how you can better manage it. There is a certain amount of give and take, or fluidity, to a budget because it is constantly changing with the needs of your family.

The first thing you and your family need to understand is that a family budget is a long term solution to many financial problems. It will give your family a solid financial future which will benefit all members.

The best way to do this is to talk to your family about what type of financial goals your family should have and any budgetary constraints you are facing at the moment. Lay it all out for everyone to see, from mortgage payments and other bills to long term financial goals that include retirement and college funding. If you can help them see the whole picture and how they fit into it your chances of successfully building a family budget are much greater.

If you build an environment in which your entire family is working together for one common financial goal a budget will be much easier to incorporate. A good way to do this is to have each family member create their own mini-budget so they can better understand how their spending may be affecting the big picture. If they can find places to cut back on this can be translated into the overall family budget.

One way to rein in an over exuberant child who thinks money just magically appears out of the ATM machine is to have them budget their own allowance. If a child has to use their own money to buy the things they will soon learn the value of money. Not only will this go a long way to helping the family budget it will start to teach them how to manage money which will stay with them into their adult life.

As you build your family budget you will see patterns of spending start to emerge. Pay close attention to these and see if some of them are really necessary. Often times the things you are taking most for granted, such as eating out, will eat up a large portion of your monthly income. For a regular sized family eating out for one night could often buy enough groceries to last for almost a week.

Building a family budget is the first step to taking control of your financial future. Only when you know where the money is going can you take control of the situation and make your money work for you.

Saving money at the grocery store is an awesome way to free up extra cash to spend in other areas or to just make ends meet. As we have seen, cutting your costs on groceries is definitely doable. If we work hard enough at it, we can really save a bundle. However, freeing up lots of extra cash and having the money just disappear elsewhere is not the best way to manage it. And, that brings me to my next biggest passion. Budgets. I am now a firm believer that we all need a budget. If we make $20,000 a year or if we make $500,000 a year. It does not matter. We all need to start a budget and stick to it.

For many, many years my husband and I worked and spent, worked and spent. As our incomes increased, so did our spending. Now the problem with that is that I can not even tell you what we bought. But, I can tell you that it was truly nothing that we needed and it was definitely stuff we could do without. Had we been on a budget, we would have been in a much better situation when my husband lost his job a couple of years ago, a much better situation now that we have 3 kids in college and a much better situation while we actively plan for his retirement. That is not to mention our children's weddings that might be in our near future. (Oh please kids, give me about 5 years!)

So, here are some ways to help you manage your money and plan a budget for your family.

1. Go through your income and expenses. Look at every single bit of income that comes in and every single bit that goes out. Write it all down. Everything. Every gift, every fast food purchase, everything. Once you have it all written down, start with the items that are due every month and can not be changed (at least not right away). Then make a list of the bills that you can adjust. So you should wind up with 2 outgoing expense categories: Fixed Bills and Variable Bills.

• Fixed Bills: mortgage/rent, car payments, phone bills, etc.
• Variable Bills: groceries, gas, dining out, entertainment, clothes etc.

2. Write your budget: Get to work setting up your budget. If your mortgage/rent is $2000 and you are budgeting every 2 weeks, then $1000 per paycheck gets put aside for that. Go down the list and account for everything. If you don't have enough then you will need to make adjustments. That is a must. Your outgoing cash MUST NOT exceed your incoming cash. If it does, then go to your variable bills and start cutting. If you have extra money leftover, then that should be used to either pay down debt, add to your emergency fund, savings account and/or retirement account.

3. Emergency Fund: If you do not have an emergency fund, you need to add that to your budget line. Get yourself $1000 saved up as quickly as possible. If it means selling off some stuff on eBay or at a garage sale then do it. If it means, eating out of your stockpile for a month or 2, then do it. It's very important to at least have a small emergency fund so when something goes wrong, you don't have to pull out a charge card to pay for it.

4. Cash Envelopes: We follow the Dave Ramsey system where we use a cash envelope system. Every 2 weeks (because that is how my husband is paid) we pull out cash from the bank that we have budgeted for a select few items. We place the budgeted money in the envelopes and use it over the 2 week period. If we run out, we have to wait until the next paycheck. Here are the cash envelope budget items we use:

• Groceries
• Gas
• Clothes
• Haircuts
• Dry Cleaning
• Blow Money for my husband
• Blow Money for myself

Blow money is just that, money that we each can put in our wallet and spend on whatever we want. At $25 each, every 2 weeks, we are not getting very far with it but it's nice to have some extra cash in our wallet.

5. Virtual Cash Envelopes: My biggest problem, when we first started on our budget, was not with the money that we pulled out for the cash envelopes but with the money that was budgeted and left in our bank account. I didn't want it to just sit in one account, all together in one big small lump. I wanted it to be assigned an envelope. But it was in the bank which became a challenge to organize it. So, I decided, since we use Quicken to track our banking, that I would set up separate accounts in Quicken and "transfer" the money out of the main Quicken checking account and into each of the budgeted separate accounts. How I did this was by setting up other "bank accounts" within the Quicken software. Each new "bank account" was named the budget item such as Mortgage, Phone Bill, etc. My money still stays in 1 account at my bank, I just show it, in Quicken, as moving from the main account to its budget account. So, when I go to pay my mortgage, buy a present or have the car repaired, the money has already been accounted for. I simply deduct it from the money that accumulated in its budget account.

I do this in Quicken, but you could do this in Excel or even use the free software Mint to manage your budget. Some bank accounts now offer this right online as well. Or even if it's just old fashion pen & paper. Whatever works for you and your family. Here are some of the virtual envelopes that we have:

• Mortgage
• Phone
• Car Payment
• Car Repair
• House Repair
• Hospitality
• Gifts
• and more (unfortunately)

6. Sticking with it. Once your budgets are set, the key is to stick with it. It's easy to pull from one of your budgeted accounts one month to pay for another budget that has run dry. The typical thing to do is to say I'll pay it back next paycheck. Well, trust me when I tell you, 9 times out of 10 that won't happen. The money never gets back to where it should be and before you know it, a little hole has been dug that you are having trouble climbing out of. What happens next? Those credit cards come out to pay, not for fun stuff, but for the stuff you had on your budget that you can no longer keep up with. So, STICK WITH THE BUDGET.

I am not going to lie. When we first started, the first 3 months were torture. They really were. I thought it was a hopeless cause but I knew if we kept plugging along that we would be in a better place. And, it did get easier. It really did. And now, I am so thankful that we are on a budget. Being on such a strict budget is actually such a freeing feeling. I know that sounds weird but we (including the kids) know our limits now and easily stay within them. And, the funny thing is, our budget has not changed since we started it. But, when we first started, I thought I was being squeezed and would never be able to continue with this tight budget. But, now, I have no desire to change it.

Soon, all across many companies in many countries, HR Directors will be completing the dreaded annual budget process. On such critical occasions, the experienced HR Director, as they look across the boardroom table, meeting the CEO and the CFO, typically will be mentally prepared for the sacrificial budget cuts that are customary.

Fundamentally, the HR budget is a great opportunity to reposition and reinforce the HR function as a strategic partner, by embracing the budget process to gain strong credibility from the executive team. A few months ago, I was coaching a HR Manager struggling to move into more strategic HR. When it emerged that she had no HR budget, one of the first action steps was developing a proper HR budget.

Early in my career, I was fortunate by being appointed as head of support services for a division, which included managing two accountants, HR staff and other support functions. Though I didn't fully realise it at the time, I gained a strong understanding of the value of good annual budgeting. These lessons were reinforced through rigorous monthly variance analysis (anything over $1,000 or 10%) and reporting process, where I had to meet with all the department managers and present the division's financials to the leadership team. Not only did I learn a lot about the business, but it also gave me great budgeting skills for more senior HR roles that followed.

HR Initiatives are projects

In one of his books in the early nineties, Tom Peters strongly recommended for organisations to adopt a project approach. He suggested that it was a much better way for companies to get things done, by changing into a results-based mind-set. In fact, he went as far as defining project management as a premier skill for future managers.

It is critical for HR to define as many processes as specific projects, be it the 360-feedback review; the annual pay review; the development of a new leadership program; or a new coaching program. As a practising consultant, it is very helpful to understand the broad budget for a project, as it is difficult to design and develop a Rolls Royce HR project with a Toyota budget.

Clearly, by using business strategy to identify the people drivers and HR initiatives that will support delivery of the strategy, is the best starting point for developing your HR budget.

Develop a partnership with the CFO

Many line managers rely on an accountant to provide them with financial support, including budgeting and monthly reporting. HR should also have an accountant that supports the HR function. In addition, the HR Director should develop a close partnership with the CFO, to ensure there is a close working relationship. In most companies, other than capital-intensive industries, employee costs make up the majority of fixed costs. I always invited the CFO to join me when I reviewed annual pay increases with the CEO, and in reciprocal fashion I was invited to attend budget presentations, which gave me a great overview of the business, but more importantly, an opportunity to ensure that all HR initiatives are clearly aligned with business strategies.

Encourage team ownership

I am a strong believer and supporter that every HR team member should own some line items in the HR budget. For the HR Administrator, it could be stationary budget, or coordinating travel and accommodation. Specific budget sign-off authority helps the team to review the budget on a monthly basis, by reporting on variances, as well-being involved in budgeting and approving all expenditure for their specific costing codes. It also develops their financial and business skills.

Encourage clarity on people costs

It is tempting to exclude some people related expenses and leave it up to individual line managers to include in their departmental budgets. Some companies have very different approaches. I won't try to get into the benefits or disadvantages of different ways of including or excluding costs, as often it is viewed more as a control issue, rather than a clear understanding of achieving better visibility and coordination. Still, I think it is inconsistent for a company to adopt a strong employer branding philosophy, only then to leave it up to individual managers to decide how much they would budget for recruitment advertising, at the risk of using inappropriate advertising for certain roles. My personal view is that all recruitment costs should reside with the HR function, as it is primary function of HR to ensure the organisation attracts the right people into the business. Get that right and many of the other people issues become secondary.

Be courageous and absorb the real people costs

Again, the CFO and the CEO would benefit from visibility of understand the total investment for staff development in a coordinated learning budget, for example. Some years ago I witnessed a number of managers simply excluding various approved corporate programs, due to repeated budget cuts. The inconsistency that resulted was a major concern for the national service provider, as well as those managers that wanted to retain the program but succumbed to their budget review cuts. A much better solution was for these company wide costs to be absorbed by the HR Department, despite concerns about ownership and control.

Provide value to the business

One of the companies I worked for, a contracting business, had an internal invoicing system, which meant all HR costs had to be recharged to a business unit. Every interview I did, every assessment I conducted, every reference check I completed, was charged to the hiring manager's budget, subject to proper sign-off and acceptance. This was a great way to learn how to provide real value to internal customers. As a consultant, you will quickly discover that real customers only pay when they believe they have received real value. HR should often reflect on whether the business would really be willing to pay good money for some of their services. If not, those are the first services that should be reviewed during a budget exercise.

After saving a company $3 million a year in WorkCover premiums, through a best practice injury management program, I negotiated some people investments with the CEO in other areas. The credibility of the HR function is significantly improved when you can demonstrate real savings and value.

Embrace the budget process

If you are ready to review your budget process, to build closer relationships with the CFO, to define as many HR initiatives and services as projects - if you are keen to adopt a more effective commercial budget process and to deliver real value to the business - then you are ready to take a seat at the executive table as a respected contributor.

Establishing and staying on a budget is one of the best ways to establish or restore credit. Budgeting is a road map to strong financial health and strong financial health is an absolute requirement of restoring and maintaining strong credit. The two go hand in glove.

While the mechanics of establishing a budget are quite straightforward, the plain fact is that it takes a powerful emotional and mental commitment to stay within the limits of one's established budget. One of the most common mistakes made by people that attempt to restore financial security by establishing a budget is that they discard the whole thing if they blow one month by overspending. This is often enough to derail the whole project. Budgets, like most things in life, are not hard and fast rules, rather they are guidelines for spending based on data collected about income and spending habits. They are not fixed, carved in stone, and unyielding. They are, rather, flexible and fluid having the ability to adapt to new conditions and to poor implementation. Budgets must be revisited often in order to make adjustments as life changes. There are several things one can do to make budgeting successful.

• Make Budgeting a Team Effort. If budgets are created by only one member of a team then the whole budget is going to fail. It takes a mutual understanding and a family commitment to make budgets work.
• Plan Your Shopping in order to Avoid Spontaneous Purchases. Make a list before shopping. Such a list is protection against impulse shopping and impulse shopping is often a budget killer. If you simply do not feel right unless you are making an impulse buy then limit yourself to one impulse item per shopping trip and keep that purchase under $5.00.
• Revisit your Financial Goals on a Regular Basis. By revisiting your goals you are more likely to focus on those goals and attain them. By revisiting your goals you are more likely to stick to your plans rather than straying.
• Establish a Reasonable Cash Requirement for the Week and Stick to It. Pay yourself an allowance and do not go back to the well for more money even if you can rationalize the reason for running out of cash. The key to making this work is to establish REASONABLE requirements. If you have cash left at the end of the week you should save it for the times in the future when you will go over your preset limit.
• Budget for Family Fun.The surest way to fall off the budget wagon is to not allow for fun. While you are working to reestablish financial security with a budget this line will not be a big one. As you take control of your finances, however, this line will increase and may include such things as a weekly movie or a two-week vacation. The point is that you are avoiding impulse purchases by including fun in the budget.
• Account for Cash or Cash Equivalent Expenditures. The only monies that do not require accounting are those you withdraw as your weekly allowance. You have already accounted for that money as a fixed weekly expense. The cash or cash equivalent expenses are those you make outside of your weekly expenses. A meticulous record must be kept of these expenses if you expect your budget to work.
• Finally, Do Not Use Credit to Balance Your Budget. Using credit on a regular basis is a sign that your budget needs serious reconsideration. If you have to use credit to cover those pesky end of month expenses you can be certain that your expenses are out of line and must be rethought. Borrowing to meet expenses only serves to procrastinate the obligation to pay the piper anyway.

Establishing and living on a budget, while at first, may feel a bit restrictive. In fact, it has many important rewards. Foremost among them for people seeking to restore credit is the fact that you have taken the first and most important step to controlling your finances. Living within your means allows you to sleep better, to save money, to have far less stress in your primary relationship and to simplify an otherwise complicated life.

In simple words, budget is essentially an estimation of future expenditures and income for a fixed period of time (usually budgets are prepared on monthly basis). However, this simple practice of budgeting can make huge differences in the overall effectiveness and profitability of businesses. No matter how small a business, one must set down a budget, which is the primary tool to judge your financial worth and standing in the future. In absence of a budget, you will never be able to gauge and improve the profitability of your business.

Let's read about different types of budgets in detail.

Start Up Budgets:

If you're going to start a business, first thing you should be doing is to come up with some rough estimations, laying down all sorts of expenditures that includes company registration, licensing, purchasing equipment, hiring staff, overhead and advertising expenses, along with the estimated sales. Subtracting expenditures from the sales will give you an idea if the business is feasible or not. You can try to cut down some expenditure or increase per-unit-prices (when possible) to make it more profitable. Remember that a common mistake many start ups make is putting unrealistic numbers in sales section, which means the budget will show a very promising picture. Therefore, a start up budget must contain an explanation of how one has derived the expected number of sales and other figures.

Monthly Business Budgeting:

Once the business is launched, it requires budgeting on regular basis (usually monthly, quarterly or yearly). There are numerous methods for preparation, the most traditional being the budget preparation by finance department (with the help of input generated by other departments like marketing department, IT department or Manufacturing Department). There are many techniques used for business budgeting, for example capital budgeting (using overall investments & assets) or cash budgeting (that focuses on cash-flows). Similarly, large corporations can have different budgets for different departments as well, such as production budget, marketing budget or research & development budget. One must remember that preparing budget is not the only thing that a business needs to do. One must keep comparing real costs and profits to the estimated figures and make corrective changes (if the real figures are diverging from the estimated ones).

Personal Budget:

Benefits of budgeting are not limited to businesses and individuals or households can benefit as well. Personal budget is a monthly plan that distributes the overall income towards short term expenditures with the target of saving for long term financial plans. However, personal budgets should not employ complex budgeting techniques.

I know you've heard it time and time again, in order to manage your finances you need a budget. Everybody knows this is true and still not everybody budgets, knows how budget or knows exactly where to start.

First things first, a budget is a tool it can be as simple or as complex as you want it to be but the end result is the same. It takes away the guess work, eliminates the worry and puts you in control of your money.

I've seen people shudder and sometimes run for the door at the sound of the word Budget and yet their finances are in a shambles. The amount of effort needed to set up and maintain a budget is minimal which is why it is so surprising to see so many people go to great lengths to avoid doing it. Once put into place, the rewards of being able to predict whether or not you can afford your latest desire (without worrying about it after the purchase) are considerable.

The steps to setting up a basic budget are as follows:

Step 1.

Decide which type of budget fits best with your situation.

" Weekly

" Fortnightly

" Monthly

If you receive most of your income on a monthly basis it may be easier to set up a monthly budget. If you receive other income on a weekly/fortnightly basis, you will have to calculate what it would be on a monthly basis in order for the budget to work correctly.
E.g: Weekly amount x 52 / 12 the result is your monthly income from that source.

Step 2

Calculate your Total income from all sources.

Step 3

List all of your expenses (everything that you spend your money on) and total it.

Step 4

Deduct your Expenses from your income, don't panic! This isn't the time to go into shock or to tear up the sheet and go into denial; it is time to take action. Think about it you can now see exactly how you stand financially as scary as it may be, all hope is not lost. You have the opportunity to take charge and gain control of your finances possibly for the first time!!

Step 5

Time to be brutally honest:

• How many of the things on your list are an absolute necessity?

• How many things can be modified?

You don't need to cut out everything in one fell swoop, that sort of change would be too drastic although in some situations, it could very well be necessary.

This is where you need to take stock of your spending and evaluate the things on your list. See which items could be modified to some degree. It won't make a noticeable difference to your lifestyle but it can be surprising how even the slightest change could have quite a dramatic effect on your budget.

After a few (hopefully minor) adjustments, you now have your new Budget sitting in front of you, you have worked hard on it and are absolutely astounded by the results of your efforts, you can see that although at the outset, things were looking pretty grim, you now have a plan in place that is workable and accurate. You can see where you are going and how you are going to get there so what's next?

Step 6

You MUST adhere to it! Update your budget as you spend your money, no matter how small the amount, include it, EVERYTHING needs to be accounted for.

For more information, useful tips and advice go to: Building a Budget

Want to make sure your marriage doesn't end up on the rocks before you get to the chapel? Then set a realistic wedding budget -- and stick to it.

In the process of planning a wedding, budget concerns often is a source of disagreement for a couple. They may have different ideas about what kind of wedding they want, and about what they can afford. To make the wedding a truly happy occasion, it is important that the couple discusses financial constraints early.

Set A Budget And Save For It

The first tip is -- discuss finances before the wedding plans begin. Everyone involved in the decision-making process needs to understand exactly how much money is available for the wedding.

To maximize that budget, you should start saving early for your wedding. Advance planning and saving will allow you to maintain or even exceed your budget, comfortably. And that will make wedding planning easier and more fun.

Get Everyone On-Board

Once your wedding budget has been established, set it aside for a few days and then review it again. This gives everyone a chance to let the information sink in. The budget review after this waiting period gives the participants a chance to verify that they understand and agree to the budget. This is vitally important, because someone who does not agree with the budget may overspend in 1 area, leaving the rest of the budget in jeopardy.

Budget Line Items

When you've decided exactly how much money is available for your wedding, the next step is to divide the total into budget categories, such as the venue, food and drink, bride's attire, groom's attire, transportation, entertainment, photography, favors, centerpieces, and gifts. It is also advisable to set aside money for unforeseen expenses.

Who Pays

Part of establishing a budget is to be clear on who will pay for what.

Shopping And Negotiating

You will need to negotiate contracts for services, and so you must know the budget for each area of the wedding. If you have allotted $250 for entertainment, look for a DJ whose rate is approximately that amount, then negotiate to ensure that you remain under budget.

It's wise to shop around and compare prices for services. A company may come highly recommended, but if they are outside your price range, let them know why you are going to have to choose another company. You may be surprised at how willing they will be to give you a better offer.

Substitute Creativity For Cash

Doing things on your own is another way to stay under budget. Homemade invitations or making your own favors or centerpieces can greatly reduce the wedding cost, freeing up funds for other areas of the wedding.

Do not fall into the trap of viewing your budget as restrictive. Instead of thinking about what you can't afford, focus on how you can make your wedding and reception truly unique. You will be inspired to create a wonderful, memorable wedding regardless of your budget constraints.

Anticipate The Unforeseen

Realize that there are bound to be snags along the way. If you go over budget in 1 area, you will need to cut the budget in another area. As long as you stay aware of your spending and realize the ramifications of all your actions, you can roll with the punches and alter your plans to accommodate any needed changes.

Make It A Wonderful Memory

A wedding budget can cause emotional strain on a couple and their relationship. It is important for them to discuss their finances and establish a clear budget for their wedding plans. Doing this early in the wedding planning process can help the couple to avoid conflict during the planning phase of the wedding. It can also make the wedding more fun for everyone, and start out the marriage on a positive note.

After all, working together is what a marriage is all about.

Budget lapsing describes the practice of restricting the use of monetary budgets to a certain period, typically a fiscal calendar year or quarter. This mechanism allows for a better way of monitoring the spending of assigned budgets by providing a finite time horizon for spending activities and is an important organizational performance measure. By rewarding budget compliance it influences and controls employee spending behavior and is an essential tool for cost management.

Budget lapsing also ensures that funds provided for a certain period of time are being used during that period. If a company defines a 5-year mid-term strategy with expected growth targets by year and assigns budgets accordingly, the consumption of these budgets needs to follow the original plan to ensure this strategy is supported. Overspending or underspending of budgets by individual business units might impact the strategy due to existing organizational dependencies. Also, for multi-year programs, the assignment of yearly budgets can provide an early indication of cost overruns and provide beneficial information for management decisions.

However, this practice might promote undesirable employee behavior. The fact that unspent budgets expire, might encourage managers to spend the remaining budget on unnecessary items at the end of a period due to "use it or lose it" thinking. Another possibility could be that remaining funds are provided to other business units that might need the money. Although this is the better alternative it would falsify the operating results of the benefiting business unit and could lead to incorrect management decisions.

The main reason for completely consuming assigned budgets might however be the underlying budget planning process. Many companies consider the amount spent in previous periods as baseline for future budgets. If an assigned budget is not used in the current period this might result in a smaller budget in the future. Given the uncertainty of future spending needs, managers will tend to use the existing budget to be in the best possible position, with the largest budget possible, in the future. Even for growing companies the impact of possible budget reductions will lead to such reactions. Assuming a company plans to grow 5% during the next year, the yearly budget might be defined as spent amount in previous year plus an additional 5% increase. Managers that are aware of this simplified budgeting method might fear that they could receive future funds that are smaller than the expected growth rate and therefore feel motivated to use up the assigned budget. As these examples show, budget lapsing combined with a simplified budgeting process doesn't seem to support thriftiness. In addition, in the course of time such processes would justify cost increases in accordance to company revenue increases although a proportional cost increase might not be warranted. Even during constant growth periods, company costs might vary or even decrease (e.g. due to higher initiation costs, step costs) and should be carefully analyzed.

However, there are possibilities to avoid these pitfalls. One option is to monitor spending patterns and to require additional approval and justification for year-end spending activities. This measure might help to reduce unnecessary spending but eventually managers could adjust their spending behavior to avoid year-end peaks and bypass year-end restrictions. Another option is to change the budget planning approach for certain cost categories to a more sophisticated method at least once in a while to 'reset' budgets and avoid spiraling cost increases. External market or industry information and benchmarking activities could support this task.

Furthermore, using budget adherence as an individual performance measure in rewards management needs to be assessed carefully. Overspending should be avoided penalized due to the bottom line impact, however an exception process should be defined and communicated for reviewing and approving additional budget needs. Underspending should not be rewarded due to potential effects on company growth plans and negative impact on employee satisfaction.

Budget lapsing is an important accounting feature that is required for monitoring and controlling expenditures and its benefits seem to outweigh potential disadvantages. There are methods to prevent misuse and waste, however they can be costly and might still allow for loopholes. The better approach for creating the desired behavior is to educate employees on the impact individual actions could have on the company results, encourage entrepreneurial thinking and have an open communication on budget topics.

Are you trying to open your own small business or maybe you already own a small business? Have you ever wondered why so many small businesses fail? Is it because they do not have a market for their product or is it because they do not work hard enough?

No. Most small businesses fail because they do not budget correctly. Small business budgeting is incredibly important and you need to know the correct way to budget. Here are my top 3 small business budgeting secrets for you to use to be successful with your small business.

Small business budgeting secret #1 - Over budget

When you first write your business plan to get funding you need to over budget. Always plan your small business budgeting to include the highest prices you can find for the specific area of your business.

You need to plan for the most expensive and then buy something that is adequate to your business needs. This will ensure that you get enough funds to support your business. It is better to have too much at the beginning than not enough.

Small business budgeting secret #2 - Do not over spend

Over spending kills small businesses and you need to make sure that you do not over spend. When you have extra money that you were not expecting to have, save it rather than spending it. This will ensure that you always have extra cash in emergency situations.

This extra money can come from a big month in sales or your over budgeting. It does not matter where it comes from, if it is unexpected money, save it. You will be glad you did when you have a bad month or find that there is a new expense that you did not plan for.

Small business budgeting secret #3 - Take luck as luck

When you have a huge month in sales, like a retail store does in December, count this as luck, and nothing more. If you land a huge sale, count this as luck and nothing else. You are not going to have your best month every month. So when it happens chalk it up as luck, and move onto the next month.

This will ensure that you do not plan on having that huge month every month. That way if it happens again you will have extra money because your small business budgeting did not include it in the plan. It is better to keep having huge, unexpected months, than to have one and never make it back that, but have planned for the huge month every month.

There are 3 top small business budgeting secrets for you to use when you are writing your business plan or planning your new budget. It is important that you budget correctly or you will never give yourself and your business the chance to be successful.

If you're deeply in debt and have been for years, you may be losing the hope of ever getting your finances under control again. Though your future can look quite bleak with large amounts of debt, have hope: There are steps you can take today to start managing those debts, and keep them from getting worse.

One of the best ways to manage debt while still enjoying life, is to use a personal or household budget. A budget is simply a financial plan. It catalogs how much income you have, and how much must go out each month.

Budgets are not hard to set up, but they can be a bit difficult to stick to. With a bit of willpower and discipline though, budgeting can help you control how much money flows out each month, and in the process it can also help you avoid additional debts. Sometimes budgeting can even help you reduce the current debts you have.

To create a budget, start by asking yourself a few questions, and writing down the answers:

1. How much total income do I have each month? Don't make the mistake of using your salary here, you need to work with usable income in your budget. If your "salary" is $50,000 per year, you can't just divide that by 12 and have an accurate monthly income. Deductions are made before you get the paycheck, so for the purpose of budgeting: Income is actual money received - after taxes or any other with holdings.

2. What are my fixed expenses each month? Fixed income includes bills that are always the same. These include mortgages, rent, credit accounts, car payments, and insurance.

3. What are my variable expenses each month? These will include utility bills, gasoline, and groceries.

By their very nature, variable bills are harder to budget for. If you have a year's worth of previous bills available to use as reference, add them all up and get an average. Or get a high and low, then create an average from that.

How you budget for these expenses will be your personal choice. You can use an average, estimated high, or estimated low. If your electric bill runs $150 for about 9 months out of the year for instance, but $300 during the three or four months of summer, then you might choose to budget just $150 per month for that bill. It would be smarter however, to budget at least $200 a month. This would allow you to accumulate extra in that part of your budget, so you'll have the added expense already covered when your more expensive months arrive.

Be sure you do not add any extras or luxuries into the above two steps. Those should simply be lists of required expenses you have each and every month.

Total your fixed and variable expenses, then subtract them from your overall usable monthly income. This is known as your "disposable income". This is where you can spend on luxury items, put something away into savings, or put a bit extra towards outstanding debts.

The ideal option is to budget for all three. Allow yourself some luxuries: Denying yourself a bit of fun or entertainment will only make you resent the budget more, and you'll be likely to stop following it soon.

Also allow yourself to put something into savings. Having an emergency fund socked away adds quite a bit of confidence, and helps relieve the stress of large debt.

Last but not least: If you're able to, use a little of your disposable income to pay more than you have to on at least one debt each month. The faster you start paying those down, the more disposable income you'll have, because you'll be cutting out the interest those debts generate.

Now that you have everything written down, with estimated or fixed dollar amounts for each item, you have a working beginner budget. Stick with this plan each and every month and you'll soon find yourself sleeping much easier at night... and maybe even conquering some of your debt demons too!

A common approach to achieving the best use of cash involves picking the "low hanging fruit" by identifying and attacking your top five or so expenditures. This is usually done by looking at your spending patterns over time, and identifying recurring patterns and amounts that can be predicted and managed. Your adviser can provide you with help and tools to create a budget to do this.

The devil is in the detail

You may think you already know where most of your money is coming from and going and what the big chunks are. Salary and interest. Mortgage, school fees, car loan, investments, taxes. "OK, let's move on", you say. But before you do, consider that this knowledge isn't enough to be meaningful. You need to know what elements are controllable and what aren't, and what changes can be made to income and payments of these amounts to smooth out the peaks and troughs. It might also surprise you that one of your "big five" controllable expenses may actually be coming out of your ATM card, or from your teenage daughter's mobile phone bill.

To develop a strategy to make the best use of your cash, you'll need a budget. Creating and referring to a budget is the only way you will know what you are spending your cash on and what can be controlled. To create a meaningful budget, you'll need to:

1. Commit to the process;
2. Establish a savings goal;
3. Look at your income and spending history;
4. Consider how that history helps or hinders the goals you've set earlier and develop strategies to correct bad habits;
5. Consider new events that will affect your income and expenditure in the coming year;
6. Set financial targets for key controllable elements based upon your strategies and new events; and
7. Monitor your actual experience against your budget to identify and correct shortfalls to reach your goal.

Commit to the process

Creating a budget enables you to identify where all your money comes from and where it goes over a year, and is the only way for you to gain control over your cash. To create a budget, you'll first need to realise the importance of doing so and commit to the process. There's no point going through the exercise if your figures are based on wild guesses or wishful thinking. Remember the old axiom, "garbage in - garbage out".

Establish a savings goal

The corporate business planning process can be a good model for setting personal goals. The comparison comes in handy concerning the budgeting process. When a company sets out to create its budget, the Chairman and Chief Executive will agree and set a profit target for the year, against which the budget will be built. In the same way, you should set your after tax savings goal for the year, for example at "10% of income".

You might think that this target is easily achievable - but, do you really know that you are saving money at all? Later activities in the following chapter will help you to determine this. For the moment, and until you become more familiar with your budget, 10% of savings is probably a good rule of thumb.

Look at your income and spending history

Unfortunately, there's no better way to identify your income and spending patterns than to simply keep a record of where all your cash comes from and goes over a period of at least three months. If you aren't analysing your expenses over a full year, you'll also need to consider other large one-off expenses that occur, such as rates or school fees. Once again, your adviser can provide you with a diary tool to collect information about your income and outgoings over your nominated period.

Next, consider what the resulting annual amount for each item is likely to be if you didn't make any changes. This will be the basis for creating your budget.

Once you've identified all your income and expense categories and annual amounts, you'll need to consider in which months these amounts occur. You'll be doing this so that you can identify any peaks in expenditure and troughs in income that need to be managed. Again, your adviser can give you a worksheet for this purpose.

Put your history in context

If you've previously determined your goals in an earlier exercise, that is a logical place to start. Consider the financial impact of these goals over your budget period, and how your historical patterns impact negatively upon your goals. Work with your family to identify ways in which you can improve your historical income and spending patterns, and write the results in your budget worksheet.

Consider new events that impact your historical patterns

You may be expecting to change jobs in the coming year, or perhaps your daughter is moving out of the house. There may also be major capital expenses you are planning (such as a new car) that will impact your cash position. You'll need to adjust your budget to account for things that will affect your historical patterns, and determine your expected cash flow for the year.

Set financial targets for the coming year

After all that hard work comes the fun part. You can play Treasurer and identify areas where spending cuts can be made, especially for major amounts that you can control. Do the same thing for income, assuming that you can make improvements there as well. At the end of this step, you'll have completed your income and expense budget.

Monitor your activity

Anyone who has created a budget but has not compared actual activity against it over time has only done half the job. So far, you've identified and probably been surprised at your spending patterns, and have promised yourself to try to be good in the future. What you really need to do is to compare your actual activity against your budget on a regular basis and see what shortfalls arise, and then take steps to get yourself back on track.

As you've done during the budgeting process, you'll also monitor your actuals to determine the best ways to smooth out the peaks and troughs in your monthly cash flow.

While your adviser can work with you to help you monitor progress and develop strategies in response, you might also consider:

• Disciplining your ATM withdrawals used for cash purchases to less than 5% of your total expenditures;
• Identifying and reducing your spending on luxuries (you'll need to think twice about your definition here), especially if your history shows that you aren't saving at least 10% of your after-tax income;
• Renegotiating contracts and getting a better deal for such things as mortgages, car loans, mobile phones;
• Working with your adviser to minimise your tax obligations; and
• Not increasing your spending in anticipation of windfalls or salary increases - they may not happen.

Finally, a by-product of this monitoring activity will be an increasingly accurate source of data against which you can prepare your next budget, so you can complete the cycle again.

After surrendering your financial debt burden to the Lord and developing a zero-based budget, you are ready to start living in that budget. Envelope budgeting is your ideal complementary tool to prevent more debt.

What is envelope budgeting? Simply, for each category in your zero-based budget, place one-twelfth of the years budgeted amount in an envelope; that's it, one envelope per category. When you need to spend, take funds from the specific envelope. When the envelope is empty, the budget is finished, and you must wait until next month to replenish that envelope and continue the process. It's that simple.

Still, many folks have valid concerns about envelope budgeting. Let's look at these two. First, you might be uncomfortable keeping cash in your home but want to use envelope budgeting. Second, you are unfamiliar with the treatment of amounts such as car maintenance that occurs sporadically during the year?

Using Envelope Budgeting But Not Keeping Cash At Home

If your zero-based budget for groceries was $300 monthly, and you want to use the envelope system, but wish to keep cash in the bank, what do you do? Before I answer, let me caution you. Typically, you spend less using cash than with debit or credit cards. The research is clear: you spend fewer dollars using cash, more with debit cards, and even more using credit cards.

Working with the envelope system while keeping funds in the bank is feasible but will need a bit more effort, and discipline. In the grocery's envelope, place a note paper, and mark on one side, budget for the month, $300. Before you buy groceries, estimate how much you will need, withdraw it from the bank, and record the amount on the flip side of the paper. If you withdrew $50 from the bank, but spent $47, write this amount on the paper, and place the $3 change in the envelope.

Once withdrawals total $300 for the month, your groceries' budget for the month is finished, unless you have unspent cash in the envelope. Assume in the month you withdrew two amounts, $50 and $250 and spent $47 from the first, and $240 from the second. The balance of unspent cash in the envelope of $13 ($3 plus $10), is the amount left to spend for that category, for that month. Repeat the process next month.

Envelope Budgeting For Sporadic Expenditures

Keep budgeted funds for these items in the bank instead of in cash in envelopes. Open a separate bank account and monthly, place one-twelfth of the yearly budget for these items. As above, place a note paper in an envelope for each of these categories, and write the budgeted amount on one side. Before spending, consult the amount noted on the paper in the envelope, and ensure you do not exceed indicated amounts for these items such as your car license, insurance, scheduled car maintenance. Withdraw needed cash, or write a check, when you need to pay these items.

Summary

Zero-based budgeting is the tool you use to develop your estimated spending for the year. Envelope budgeting is an effective complementary tool to help you control your lifestyle choices. Ideally, place cash in category envelopes and spend cash as needed. Do not borrow from categories; when your envelope is empty, you have no budget left.

These two tools require discipline, need effort, but will help you get out of debt and live debt free. Do you want a lasting change to move from bondage to debt freedom? If yes, try these tools.

Copyright © 2012, Michel A Bell

With the bargaining chips at the table for debt reduction talks, we expect to see the partisan dreams of each party spilling over into the public discourse. Raising taxes, reforming entitlements, cutting wasteful government agencies... Rarely can a deal be mentioned without the deal-breaker (as evidenced by the current debt ceiling standstill). One idea floated by many Republicans and even some conservative Democrats is an amendment to the U.S. Constitution demanding a balanced budget from Congress, similar to most state budget arrangements. The government would not be able to pass a spending plan that exceeds its income. While it is generally championed by anti-tax fiscal conservatives, this plan will ultimately lead to new taxes and greater budget peril. And with an unstable population leading into the future, a balanced budget amendment is little more than another unfunded mandate.

State and local elected officials hate unfunded mandates. These decrees from higher government force them to act in a certain way (usually very costly) without any funding to back them up. Conservatives like to take on these mandates as another example of government interference and expansion. Yet in the heat of the budget crisis, an amendment forcing the hand of budget writers is ironically a call for another strict government mandate. It forces more decisions like we face now: do we make up the difference through budget cuts or by raising taxes? There is definitely no guarantee that Republicans will have the leverage they currently have to shape the budget, and the future might see an administration with more power to raise taxes. Even worse, when we run out of budget cuts, painful taxes are the only other option.

We cannot confuse a balanced budget amendment with an easily balanced budget. It will not be simple to balance a budget every fiscal cycle, especially with the ups and downs we experience in the economy. When we entered the recession, had we had this amendment we would have no other option than to make painful cuts in programs like social security and Medicare. However, once the economy recovers, we suddenly have more money to float to these programs. This leads to a lot of problems. Do we consistently increase and decrease social security checks to seniors? Do we allow people to gamble their retirement on whether the government will return the money they paid in? On entitlement programs, we are better having a meaningful reform (which will help balance our current budget) with the elasticity to adjust to future economic changes.

A second budget crisis we would set ourselves up for is a wartime power struggle. Congress would then be forced to either lift the amendment or enact further cuts to other government programs that people rely on. Wars are certainly not cheap (as we know all too well), and I can't imagine cutting education so we can involve ourselves in another conflict. However, these are the choices we would have to make. The ultimate lesson is: our budget is too unpredictable to demand a balanced budget every year. We have seen the painful cycling of an economy, but the stock market will become no more stable with an all out partisan war every economic cycle. Think partisanship is bad now? Just wait. A balanced budget amendment might be politically popular right now, but when partisan gridlock slows or stops the services people depend on, the appeal will soon turn to frustration.

The evidence does not stop there. Demographic trends show an increasingly aged population. Social security and Medicare are funded through young and working individuals. Entitlement programs like these are considered "mandatory spending" in our budget, meaning we must pay out our obligations to those who are eligible. This places an increasing burden on our young taxpayers. Though it is clear we will need some reform, we cannot increase the strain wrought by a balanced budget amendment. These programs would consume our budget and our political willpower, and set us on a more unsustainable path than we are on right now.

Aside from the support by members of Congress and the consideration of even our top political leadership, the public generally supports a balanced budget amendment in theory. People want to see a budget that works for us. However, when the question is broken down even further, the public does not want taxes to be raised or social security to be drastically cut to meet an exact number. The solution is this. We need a balanced budget whether we like it or not. We cannot go on spending our way out of economic viability. We need significant reform and true fiscal responsibility. But we also need the option to work with our budget in the longer term, not every single cycle.

To extend the metaphor used by balanced budget proponents: a family needs to balance their budget. They cannot take on a debt load as crushing as we already have. However, a family does have the option to take out small loans to invest in solutions that are right and good for themselves and others. Most homeowners have a long-term home mortgage. When purchasing the vehicle that drives them to work, many people take out a small car loan. Even for paying the bills that keeps their family fed and housed, people use credit in manageable amounts for the good of their family. We need flexibility to honestly address our budget. We must be responsible.

It sounds hypocritical to demand a balanced budget without a balanced budget amendment. In my judgment, we cannot afford to limit our options when it comes to budget fixes. I am a consistent supporter of debt reduction and budget solutions that are substantial, but our future depends on our innovative solutions, not unfunded mandates from the past. We can balance our budget without being told to, and the American people can check their politicians through the mandate of free and open elections. We can keep our country free by not limiting our possibilities and potential.