Budgeting

Nearly every organization or group has some sort of budget process that they undergo. When budgets are treated as friendly tools, they end up being one of the most meaningful planning methods. On the other hand, when budgeting becomes a meaningless exercise that is largely ignored, it often becomes the missing ingredient in effective strategic planning. Budgets should be used to help analyze and determine an organization's needs, priorities, strengths and weaknesses. It should begin with a thorough analysis of what an organization is doing right, what is doing wrong, what too much money is spent on, and what more monies need to be expended. Far too many organizations approach the budget process simply by taking the past budgets and adding an across the board (or similar procedure) percentage. When budgets are used wisely, they help open up the eyes of an organization to the realities, needs and priorities, as well as their strengths and limitations. The wise budget leader reviews all revenues and all expenses, and then puts them into perspective with the needs and priorities. The first rule of creating a meaningful budget should be that with the exception of contracted, fixed expenses (and even at times those need to be reviewed and adapted), every item on both the revenue and expenditure side should be carefully reviewed, evaluated and analyzed.

1. In creating a meaningful budget, all estimates on the revenue or income side should be extremely conservative. Although they should be realistic, they should never include hoped - for estimates for items like fund - raising revenues, etc. These should be budgeted for based on averages, so as not to end up in the hole at a later date. On the other side of the budget, expense/ expenditures should be using near worst - case scenarios, so that there are no unpleasant surprises. In addition, organizations must never approach the budget as an excuse to waste funds or spend on items that are not necessary, because any surpluses can be better utilized by putting them into reserve funds for future relevant and important needs.

2. When creating a budget, one of the most frequently overlooked areas are in creating contingency reserve funds, built right into the budget. These funds/ reserves must be fully funded no later than the midpoint of the fiscal year. Some reserve funds that should be included include Maintenance Reserve Funds, and Emergency Reserves. These funds must be carried over from year to year, so an organization is prepared for the eventual and inevitable contingencies that will arise.

When budgets are used to plan the priorities and direction of an organization, the group invariably runs more smoothly and effectively. Those groups that use budgets as they should be used, soon learn that the budget has the potential of being the organization's best friend and most essential tool.

Creating a documentary budget is great way to think through every aspect of your film. Even though you may be eager to get started shooting your documentary right away, creating a budget can often be an enlightening experience, revealing factors that may otherwise slip under the radar. A budget forces you to think through every detail and can save you the agony of an unexpected surprise down the road.

In addition to being a great tool for the filmmaker, a documentary budget is essential if you hope to raise money for your film. A budget is usually a must-have item along with your documentary proposal when pitching your documentary idea to potential funders or supporters. A documentary budget provides an important snapshot of how you plan to shoot your film, the locations where filming will take place, how many people are involved in the project, what kind of equipment you're using and your distribution plan among other things.

Whereas your documentary proposal describes the story and vision for how your documentary will look on screen, the budget is your nuts and bolts plan behind the scenes.

Here are the three primary steps in creating a documentary budget:

1. Research - This is THE most important aspect of creating your budget. Without research, you have a blank slate. This is where you need to make phone calls, search the internet and ask for advice. You'll need to decide such things as what kind of insurance (if any) you need, how much a van rental will cost in the city you'll be shooting, how much your cameraman charges for three days of work, what's the cost of renting a lighting kit, what does the animation guy charge, will you need to pay copyright fees for stock footage, etc.


2. Build Your Budget - It's highly recommended that you use a spreadsheet program such as Excel or get your hands on a documentary budgeting template. You can certainly jot down your budget items using a plain text document, but this is not a professional (or efficient) way to do a budget. Having a spreadsheet with formulas allows you to make changes to individual items and it automatically updates the totals for the whole budget. As you conduct your research, begin inputting the various budget items including crew salaries, production equipment rental, stock footage fees, administrative costs, etc. Input everything you can think of!


3. Refine Your Budget - Once you've created your budget, you will surely be shocked by the final total cost. At this point, you will need to refine your budget to come up with a realistic final cost. Ask yourself the amount of money you realistically believe you can raise for your project? If you think you can raise $10,000 and your budget came out to $250,000, then you will need to make some hard decisions. Is there anything in your budget that is not an absolutely necessity? Or is there a way to get some items donated?

Creating your documentary budget is not a one-time event. The budget will need to be constantly updated and modified as you go.

One item you'll want to include in your budget is a contingency (usually 8-10% of your total budget). This is especially helpful if you're new to budgeting. A contingency provides a buffer in case items in your budget end up costing more than you expected.

In summary, if you are pitching your documentary idea to potential funders and trying to raise money for your film, you will more than likely need a detailed budget. It's absolutely critical that you create a budget that is as realistic and accurate as possible. Since many of your funders will be business-minded individuals, they will know if you fudged on your numbers. So do your research and put together the best possible budget that you can. As the filmmaker, you are probably eager to start shooting and making your film, but taking the time to think through every detail of your budget will pay off in the end.

If there is one thing that all IT managers want, it's more money. For you see, we all believe that if only the company would boost the annual budget for our IT team then just imagine the great things that we could do! You can sit around hoping that the company will suddenly realize just how valuable your team is or you can do something about getting a bigger budget. Let's look at what steps you can take to make this happen...

Getting Decision Maker Buy-In

One of the biggest challenges that an IT manager faces in getting bigger budgets has to do with getting support for their team. Often times the folks in the finance department have no idea what your team does for the company.

Take the time to educate both the finance teams and your company's management. Taking the time to do this will ensure that when it comes time to allocate budget money, your team will be at the top of their list.

Know Your Budget

Every line in your budget has a story behind it. Make sure that you know what your IT team's budget story is so that you can tell it to the people who will be allocating the budget dollars.

The one thing that you don't want to have happen is to have someone ask you about a line item in your budget and have you not be able to explain why you are requesting those funds. Make sure that you know what your team's budget story is and that you can tell it to others.

Practice Good Communication

Obtaining a budget for your team is a process that can take a considerable amount of time. During this time, make the effort to keep your team informed about what is going on and what the status of your efforts are.

By keeping the team informed, they will be able to keep you informed also. This means that if there are any unplanned events that occur, your team will be able to notify you and you'll be able to evaluate how they impact your budget request before anyone else does.

No Surprises!

Every budget request is based on a set of assumptions that you've made. As with all such things in life, things can change and those assumptions may turn out to be incorrect as time moves on.

Make sure that you don't get hit with any unpleasant surprises. If an assumption that you've made changes, then find out what has happened to change it. Once you know the background, take the initiative and inform the people who are in charge of allocating budgets - it is far better that they hear this from you than anyone else!

What All Of This Means For You

Budgets for IT teams are a case of give-and-take. What one team gets is what another team does not get. This means that if you want your IT dream team to get even more funding in order to do bigger and better things during the next year, you are going to have to do some budget negotiating to make this happen.

You are going to have to start things off by getting buy-in from decision makers. Then you are going to have to make sure that you fully understand your budget in order to ward off any questions. During the budgeting process you are going to have to show some leadership and keep your team fully informed about your progress. Finally, the one thing that can sink your quest for a bigger IT budget would be unwelcome surprises. Make sure that there aren't any!

It is possible to get a bigger slice of the pie for your IT team. However, this isn't going to happen all by itself. Instead, you are going to have to take steps to make it happen. Follow the steps that we've outlined for you and then you'll be able to sit back and make the most of your new, larger, IT budget!

Budgeting is a lot of fun! Why? Because it's simply telling a story. That's all it is - a story you create and write. You become a "seer", predicting events and conditions which you really don't know whether or not will happen.

A story told in numbers. How do you create a story that you understand intimately, a living document which changes and flows and which creates tremendous confidence in executing a plan for the upcoming year?

Begin with fantasy - the ideal events you would like to see happen in the upcoming year. Who doesn't like to daydream? Cost it out. The numbers will tell you what's possible and what's not.

Then, the challenge begins - what is really possible? It's fascinating to create various scenarios based on assumptions of the future. (easy to record the alternatives in Excel)

This is where everyone needs to be on the same page - budgeting = assumptions about the future. There is nothing concrete about budgeting. It's not a airy fairy exercise either. Budgeting is the best "guesstimate" for the ensuing year - that's all it is - so relax, breathe and have fun with it!

With due diligence, you can come fairly close to a realistic budget based on current facts and anticipated economic conditions.

How do you prove due diligence? With a little exercise that most people don't do. They've been taught to write out a huge report - a lot of verbiage about their analysis, conclusions - blah, blah, blah - and in the end, too much time is spent on verbiage. So why waste the time? I know - because it's expected, the standard, whatever other explanation there is. Fine.

Produce what is required but for yourself, create another type of document which tells you exactly how you arrived at each and every figure.

It's simpler and much more effective to create detailed notes about each and every line item in your budget, proving your figures by outlining your assumptions and calculations in one document, line by line. Key word here is "notes"! If anything goes wrong, the detail is there. If economic conditions change, you can make adjustments. You'll be the hero because you can anticipate problems before they arise and take steps to minimize the impact or you can "make your wishes come true". And you'll learn a lot about yourself too - you'll learn how you think, where you can improve your work and assumptive processes, and what's real, and what's not. How? You'll have all your notes and calculations to refer to quick and easy too!

And that's why budgeting is really a lot of fun - every single month the comparison of your actuals with your anticipated income and expenditures for each and every month tell you what's going on - in numbers - you don't have to read pages and pages and pages of verbiage - it's all there quick and easy. And because you built the budget this way, you understand it very well. No one can stump you in a meeting! Isn't it fun to see how well your "predictions" come true?

Working with your budget as your benchmark is the greatest way to manage appropriately. Your comprehension of your department or business increases, you become far more aware of the global economic conditions, you can employ your creativity to resolve upcoming issues before they cause major problems, you can be in touch with every aspect of your business continuously - no surprises for you! and best of all, you can relax knowing that financial part of your role is solidly in your control. What a stress reducer!

There are so many benefits to good budgeting practices, it's behooves me to understand why people fear budgeting so much and why such poor budgeting happens in so many instances. Massive budget over-runs are either a lie, a cover up or someone who created the budget didn't understand the operations. Why would anyone be in charge of creating a budget who didn't understand the operations? Budget over-runs may happen because of an act of God or some catastrophe that simply couldn't have been foreseen such as an act of terrorism or conflict, etc., but outside of those incredibly unpredictable events, budgets should be on target. Reasonable adjustments should be anticipated but not wild swings.

In other words, a budget should be a living thing that is amended as more information is gathered but the amendments should also be sensible, rational and moderate.

Now, go budget and have fun!

Most people find they go through a teething period when setting up their budgets. How to deal with? Don't stress! It's quite normal.

Budgets may well blowout in the early stages. It's important to recognize this as a sign we've not quite got things right yet and to make appropriate adjustments.

Ask yourself some questions:

• Was it just a one-off situation? E.g. car broke down, unexpected tax bill arrived.
• That's reasonably easy to handle - we'll discuss below.
• If not a single event, what caused the budget blowout?
• Have you left something out of your budget? Did you forget an expense?
• Can you cut or reduce any other expenses? Remember to shop around for cheaper phone and internet plans, consolidate expenses, cook up in bulk and freeze ahead etc. There are plenty of budgets how-to tricks for reducing expenses.
• If there is a serious problem and your budget simply cannot balance, you may have to ask some tough questions. Do you really need that gym membership? Jogging is free!
• Is it budget-leak? That's where all the little cash spending items adds up and you just keep running over.

If so, then:

• You may to get a bit tougher with yourself. Use the Cash is King method and never EVER cheat! Learn to spend less. You're doing this for YOU - nobody else, remember? New spending habits will take a while to adjust to.

Or:

• Your discretionary spending budget may be too tight - maybe give yourself a bit more 'wiggle room'. Remember - a budget that constantly leaks will eventually BLOW!

Savings are mandatory in any budget. Cutting your savings out completely is NEVER an option.

We are aiming for 10% savings (i.e. saving 10% of your after tax income) but even if we start off at 1%, that will do initially. There have to be SOME savings. These are what it's all about, remember?

These savings are intended to grow so you can then invest them. You want to send your money to go out to work for you. You can start small but you have to start somewhere.

Without Saving for Wealth Creation, you're not Budgeting to create Financial Freedom, you're merely surviving.

You may find that initially when you're still heavily focused on debt reduction, you simply can't save 10%. That's ok. Work out what you can save in the meantime (a minimum of 1%, ok?).

Once you're done with debt reduction, you'll have a lot more money available to put towards savings.

Let's go back to the first option above for a moment.

Say your budget blew out due to a one-off emergency expense.

A lot of people talk about budgets how-to but when they refer to savings, they actually mean an Emergency Fund. Savings however are solely for Wealth Creation! At least they are in my book.

It is very important to have an Emergency Fund, though. A separate bank account which you can trickle feed and build up over time usually works well.

In the early stages, there simply may not be enough money here yet to cover the emergency expense. In that case, you will simply have to hang in there and get through this period by being creative. You may have to cut back your discretionary spending, skip this month's extra debt reduction or even (god-forbid!) cut your savings amount down to a mere 1%.

Hang in there! As time passes, you'll build up enough money in your emergency fund to handle most situations without missing a step.

Whatever the reason, if budget blowout occurs don't let it worry you too much. It's a chance to learn, to tweak and fine-tune things. There are plenty of great budgets how-to techniques you can apply.

So keep up the good work!

Wishing you much Prosperity,

Miriam

Welcome to the world of "Budgeting"; a very important, yet widely neglected and misunderstood topic, in most households.

I am involved in several home-based businesses, but the most important of these by far, is managing my Monthly Household Budget. Notice that I used the word "business" to describe managing my budget. Unlike most people, I treat my monthly expenditures as a business-always looking to improve the services that I pay for by finding better deals, and reducing resultant costs. I always aim to get the best bang for my buck through increased services at cheaper costs. When I find a particular budget item that can save me $100 per month, I do not only look at this as a savings, but I treat it as if I just received a $100 per month raise, which translates into a $1,200 per year salary increase (assuming that it is recurring monthly). Yes, by being diligent and resourceful, I just gave myself a $1,200 raise for the year, which, by the way, is cumulative in effect, year-over-year. Wow! Now imagine if I can replicate this feat for multiple items in my budget, again and again. That is going to be some kind of hefty raise that I am giving myself. You see, by treating my monthly budget as a business, I provide myself with a means of increasing my disposable income and savings. I do not need a boss to give me a raise; through diligence and resourcefulness, I can give myself a raise, again and again, over and over, year over year. The long-term, cumulative effects of doing this can be quite staggering, to say the least, and one's overall net worth will increase substantially over the years, by putting this "business practice" in place.

I am an extremely compulsive and diligent budget person. Regardless of how large or small a household expenditure is, I record it in a tracking spreadsheet. I think my wife thought that she had married some kind of compulsive lunatic, when I implemented this system in my household. But, as time moved on, she recognized and understood the value of the budgeting system that I put into place in our household. Moreover, I have taught my 3 children the value of money and budgeting, and have attempted to interject these principles into their lives as much as possible. No doubt, that as adults, they will be much better off because of this.

I know exactly how much money I am spending in each category of expenditure on a daily, weekly, monthly, and yearly basis. I can honestly say that I have no friends, family, neighbors, or acquaintances that are as diligent and passionate about budgeting as I am. As a matter of fact, most people do not truly understand the art of budgeting. Sure they use the words "not in my budget" in conversation; but few, if any, actually understand what their budget looks like, how much it costs them to live each and every month, and how much money is going out-the-door in regard to their bills and expenditures for goods and services that they have procured. Many people I know constantly waste their money on frivolous spending, and neglect basic budgeting techniques and practices. Some of these areas of budgeting can individually save them hundreds of dollars per month, if implemented.

I have broken my budgeting techniques down into a series of categories listed here. Each category should have one or more specific Strategy items associated with it, that you will need to come up with. Some categories should have more budget strategies listed for it than others. Some budget strategy savings ideas will be relatively small in nature, but please do not discount these. After all, these little items do add up, and the net effect of the sum of all applied budget savings strategies, is what counts. That said, here are my budget categories that require addressing:

• Food
• Shopping
• Clothing
• Utilities
• Lawn/Garden
• Entertainment
• Household
• Weddings and Gifts
• Banking/Finance/Bill Paying
• Automobile
• Vacation
• Medical/Dental
• Other Insurance
• Taxes
• Education
• Mortgage
• Cost of Living

Next, I want you to develop a personalized Budget Action Plan while addressing each of these categories. I want you to buy a notepad (or alternatively, feel free to use a word or text editor on your computer, smart phone, or e-reader to accomplish the same purpose), and create 2 columns:

• Category: Strategy
• Budget Action

Traverse each category, one-by-one, and start listing individual Budget Strategies for each category above. Concentrate very hard on how a designated category and budget strategy item can seriously be applied to your household budget situation. Keep in mind that some Budget Strategies may seem overly simplistic or obvious. If relevant to you (and most will be), write down the budget category and budget strategy item, and one or more budget actions that you need to implement to put the category and strategy into place, keeping your personal situation in mind. Continue to do this for every Budget Strategy, in every Budget Category. Again, make every attempt to apply each category and strategy to your situation. Do not ever dismiss a particular category and strategy item because it only saves you $10 per month-these small items add up fast, and the overall aggregate monthly savings, when all is tallied up, will simply amaze you! When you have completed your Budget Action Plan, review it, and start implementing your Budget Actions, one-by-one, on a monthly, or need-be basis. By the way, it would not hurt if you went through your Budget Plan multiple times. This may easily facilitate new ideas and additional Budget Actions that can be implemented in your Budget Action Plan.

If you are honest with yourself, extremely diligent about implementing these budget actions, and have the necessary discipline to stick with it, there is no reason why you cannot reduce your monthly household budget by 20% (or more) in a given year. This should be an on going process, year-after-year, as you continuously review your expenses annually, to obtain that raise that you deserve!

Nowadays most people get very comfortable with paying for their daily expenses using credit cards. This is bad if they do not exercise self-control. This is because they may become addicted to this practice that they end up spending more than what they can afford or earn.

A way to prevent this from happening is to manage their expenses and income by having a proper budget. A budget is a tool that can help them to manage their money. And very likely this will prevent overspending resulting in unnecessary stress or ending up with liabilities.

However managing a budget may not be easy for some people. Some find the task of creating a budget a fuss and some just need help in creating a working and reliable budget. One way they can overcome this problem is to make use of money budgeting software.

In the market there are good software created by financial experts for the purpose of helping people to overcome the type of problem mentioned in the above paragraph. The software can be used to create a reliable and workable budget to help people manage their money wisely.

This is how most money budgeting software work. Most will help you to keep track of your spending and this in turns helps you to learn how to spend and as well as to save your hard earn money sensibly.

Here are some main benefits of using money budgeting software.

1. Keeping track of your expenses.

Most of the budgeting software can allow you to keep track of your expenses. Such ability allows you to get an understanding of your cash flow. You will also have an idea of how much money you earn, spend and what amount is left which then can be channeled into savings or investment.

2. Allows the creation of various possible projections of the future.

Using money budgeting software, you can do a lot more than just balancing or tracking the numbers. One of the extra features is that you can make some possible projections using the budgeting software. And once you are satisfy with the outcome you can print them out for record keeping. Alternatively you can save it digitally for future reference or tweaking.

3. You are in control.

Most people who do not have a budget to guide them usually tend to overspend. Making use of budgeting software can help you gain control of your expenditures. The software allows you to know ahead of time whether you will be overspending or not. Thus by knowing this before it is too late, you will take the necessary steps to prevent over spending more than your budget allows.

Thus at the end of the day, using money budgeting software can help you to budget. This gives you the peace of mind and control over your money. In this way, you are certain that all your spending activities are within your budget and had been carefully planned. Likewise the money you saved is properly placed in prudent investments.

Money Budgeting is a phrase that either bores them too much, or makes them depressed. But, this is how successful people deal with money - they budget. It's a lesson that must be learned to succeed financially in this life. Here is some helpful information.

Many people are lured into the trap of spending more money each week than they are bringing in and most people are doing this without even realizing it. The main reason this happens is because we are no longer taught or remember how to budget our money. With the introduction of credit, it has become easier to use money that you don't actually have.

This lack of money budgeting in today's world is beginning to reach a cataclysm with many families, and individuals who are now finding themselves with severe debt problems and little knowledge about how to turn their bleak situation around.

Even with all of the bad debt write-offs, banks are more than happy with the way things are. Banks build in their own risk factors based on bad debt in their interest rates to give them profit regardless of bad debt write-offs. Simply put, those borrowing money are paying for their inability to budget effectively.

Tips to Effective Money Budgeting

The basics of budgeting start with you listing incoming money over a period of time, such as a weekly, monthly or fortnightly, then listing the outgoing money, such as mortgage payments, car re-payments, credit cards and so on. Money budgeting also has many other factors used to make it effective, including keeping a constant eye on how your budget is doing and changing it to accommodate unexpected problems without overspending.

Keep all of your receipts and account for what has been spent. Use this to make calculations as to where your money is going and for what. Expenses can be divided into four main categories. These are:

-Housing: mortgage, rent, utilities, property taxes, insurance, etc.
-Work: transport, parking, work clothes, lunches and if you have children, day care
-Living: food, clothing, medication, insurance, etc.
-Personal: entertainment, newspapers, magazines, alcohol, gifts and education, etc.

Once you have categorized all of your bills, take out a blank piece of paper and a calculator. Figure out what is being spent each month on these categories and what can be cut out of the budget to allow more money to go toward bills or improving your financial situation.

Many people get so used to luxuries, they turn these things into fixtures in their weekly, fortnightly or monthly spending habits. By weeding these expenses out or making them a luxury again that is only enjoyed occasionally, you can also save quite a substantial amount of money. When you go through your spending habits, you will be able to calculate how much you are actually spending on these things.

Don't forget that a contingency fund should always be factored into any money budget. This works out to be around 10 % of your income. A contingency fund will benefit you when you need it the most, such as when you lose your job or have an unexpected expense such as plumbing go wrong in your home. This contingency fund should be kept in a separate savings account and only accessed in emergencies.

Motivation Is The Key

Motivation is very important when you are budgeting. As an incentive to create a budget and stick to it, remember that the only way to regain wealth is by spending less money than you are receiving. The only way to spend less and do more with your money is to learn how to effectively budget it and stick to your plan.

Once you start to see the benefits of your budgeting and are rewarded with more money in your bank account after you have finished paying out, you will be more encouraged than ever to budget your money.

Another way to teach yourself to budget is to give yourself a solid incentive to stick to it, and make your budget work. You may make it your goal to get your finances in order, so that you can take a vacation or get something that you and your family really wants. Place reminders on your fridge or in your wallet. By doing this, you will be reminding yourself of the reason you have decided to sacrifice some of your luxury spending.

Although this sounds great, when you budget, you will have to learn to set aside any emotions that you may feel toward your budget. Examples of emotions getting in the way and interfering with a well planned budget is when you have to cut out the things that you want, such as weekend breaks away, toys for your children or new furniture, for a while, until you have arranged your finances for the better better.

If you have a family, try to keep them involved in your money budgeting and where the budget needs to be tightened to benefit everyone to exclude non-essentials, explain to family members why budgeting is important. This will help to educate those around you about the importance of budgeting and how budgeting can help you all obtain the things that you want, such as luxuries, without them being a financial burden.

Another trap many people fall into is getting into the habit of 'keeping up with the Jones' regardless of their own personal financial situations. After all, money budgeting is about your personal set of circumstances and your personal finances, not someone else's. Just because your neighbors have just bought the latest model car or had cable television installed, doesn't mean that you have to, pay attention to your budget and let it be your decider on whether you can afford the things that you want.

Budgeting is a vital skill needed to control your finances and avoid getting into serious debt. By educating yourself on how to budget effectively, taking the time to carefully plan a good budget and monitoring it regularly you will be able to keep yourself and your family encouraged to stick with it. Set achievable goals and even though, at first, money budgeting may seem tough, it is the only way to have the things that you want, as well as a secure financial future.

You just graduated college, started a new career, got married, had a child, bought a house, bought a boat, whatever the case may be budgets are used at every stage of life. Budgets are used as a planning tool to set financial goals. Budgets are used to plan for the future to be allocating the proper resources today. Setting up a budget is very uneasy and uncomplicated, there are even online tools that will do it all for you. The harder part of the equation is determining what percentage of your income goes where. There are general guidelines about personal budgets out there, but a budget can provide you with a much better comparative advantage if it is tailored directly to your finances. Personal budgets serve people to plan and see how much money they want and can spend on each sector of their life. It is up to the individual how much money they want to put where so budgets differ greatly. Some budgets can provide people with a mechanism to save up for something that they desperately want, and once they have achieved that goal their budgeting is done with. Others use budgets as a daily tool to regulate how much money they spend on each sector of their life so that their finances can be balanced with the adequate funding.

Whether people admit it or not, budgets are complied in the mind of the individual even if they do not put it on paper. Most people have an idea in their mind how much they want to spend on what but when unexpected occurrences arise they get confused and often make bad financial decision. This shows the importance of putting budgets down on paper or on the computer so you can see the ratios of where your money is being spent. Budgets also act as an indicator to see where you are over spending and overspending. You might have not been aware of it before but your entertainment budget is greater than your food budget, may you have a problem with this and maybe you do not, it is up to you. But budgets allow you to see this information and you can assess any way you want.

Personal budgets can give a person more freedom because they do not have to worry about any unexpected expenses from affecting their daily life. When setting up a budget it can be beneficial to over account for such items as food or utilities so that there are no surprises when the bills come around. Personal budgets not only act as a planning device but they also act as a regulating device. If you go over budget in one sector that means that you have to directly reduce funding in another. This means that you will never go over budget because you are manipulating your budget so that you do not. Your budgets can be flexible must you must be aware that providing to much variance can cause you to loose track of the general concept of budgets.

As most people say, time is money. It is also very important that people learn how to budget time so that they can be more productive and efficient. The skill of knowing how to budget one?s time should be learned early on, especially before one joins the workforce. This is because having discipline with budgeting time is a skill that young people will find very important in the workplace. Young people can learn to budget time by focusing on their priorities.

Planning a study system

Planning a study system while you are in college can become an effective tool in making your college life more bearable. A study system can help you avoid the stress of cramming and all-nighters. Before you create your study system, you should first assess the subjects that you are taking and allot the appropriate amount of time that you think you need for each subject, depending on the difficulty of the subject. Your study system should also be flexible enough to allow changes, depending on how you do in the subjects.

Preparing and reviewing

In college, studying means that you need to prepare and review for subjects. Preparing involves reading assignments, doing library work, writing papers, memorizing vocabulary and solving practice problems. On the other hand, reviewing involves going through your notes, going over reading materials and clarifying new principles and ideas introduced in the class. To help you review, you should set aside a regular review period, which can help preparing and reviewing for exams much easier.

Finding time to rest

Apart from allotting specific times for studying, it is also important that you allot time for sleep and other activities that can relax you. You cannot spend all your time studying since doing so will only cause you to burn out, and you will not do well on your exams if you are always tired.

Starting early in learning the value of budgeting time can become a powerful tool for people who wish to live productive lives. Knowing how to budget your time does not only ensure higher productivity; it also means that you have enough time to enjoy the good things in life.

In recent years, there have been numerous calls for company to move away from Excel-based Corporate Budgeting to Business Performance Management/ Business Intelligence (BPM/BI) systems. Reasons cited include:

1. Slow throughput time due to the complexity of the budget.
2. Challenges in maintaining data accuracy during consolidation.

Despite the repeated summons to move away from Excel-based Corporate Budgeting, today about 70% to 80% of all corporations (from big corporations to small companies) continue to make use of Excel for their budgeting. So what makes these budget managers stand behind Excel and remain loyal to using it as their primary budgeting tool?

The 6 Benefits of Using Excel for Budgeting

The current method of Excel budgeting is not without constraints. However, the advantages for using Excel as a primary corporate budgeting tool overshadow its limitations.

1. Excel provides budget managers with a lot of control on the format of the template. Budget managers can change the layout of template when the business environment changes. With a BMP/BI system, budget managers have to give up the control to design a template that meets their business needs.
2. Budget contributors are familiar with Excel spreadsheet that requires no or minimum training to complete the template. However, they are usually too involved in their operations to find time to learn another application which is used only a few times a year.
3. Budget managers and contributors could add new worksheets to store their workings and provide an audit trail on the basis for their budgeting numbers.
4. The number of people involved in the budgeting process is not limited by the number of licenses paid. Anybody who owns a copy of Microsoft Office can be involved in the process.
5. Companies do not have to constant upgrade their software so that it will work with the latest operating system.
6. It is expensive to own a BMP/BI, which cost at least $50K (conservative estimate) and beyond, not to mention that IT support staffs are usually required in maintaining the system. Using Excel for corporate budgeting would relieve the company the problem of finding IT staff to maintain the BMP/BI system in the midst of a worldwide IT staff shortage.

At the present moment, there is no other alternative software that could match the benefits brought by excel in budgeting. Budget managers assume they have to operate within the limitations of Excel if they want to continue using it as their budgeting tool.

Now, we have developed a revolutionary method of Excel-based Corporate Budgeting that we promise that will wow budget managers and make them want to lay their hands on. We believe it's a solution that every budget manager must know, even those who are currently using BMP.

In this revolutionary solution, we retain all the benefits contained in the current method of Excel Budget. We just added more benefits and also remove the limitations contained in the current method of budgeting.

1. Those who are working on the budgets do not have to follow strictly to the layout by the budget managers. They can change the sequence of the budgeting lines based on their preference. They could put advertising cost on the first line in the template followed by marketing cost and vice versa.
2. You can easily transfer the budgeted numbers from the template to another worksheet and form a database simply by using formula. The database can be used to create pivot table for analysis and reporting.
3. Analyze the budget numbers from different perspectives. You can analyze them by products, by channels, etc.
4. Prepare reports and charts by special links which don't have to worry which line the item is located. And even when the item changes row or columns, you will still get the right numbers for your report.
5. No loss of details during the process of consolidation. The details from the lowest level i.e. numbers submitted by the different business units are captured into the consolidated database. The consolidation will automatically update the budget numbers from different business units, add new rows, delete old items and also change the numbers as the numbers in the template changes.
6. Consolidation can be as quick as a few seconds to a few minutes, depending on the number of business units you need to consolidate.
7. Analysis can be done at the highest level with the lowest level of details. For example, you can analyze staff cost by departments or even on a country level. You can even prepare pie charts to show the contribution from the different business units or countries.

What can be more taxing other than planning your personal or your company's earnings, expenditures and revenues? To make the task of tracking finances easier, the technological advancements have found out an ideal option - Budgeting Software. In fact there are various kinds of budgeting software's, which are currently available in the markets. Budgeting software's can actually make it possible for you to track down your expenditures in a much fruitful way.

First step towards planning a budget is to define categories, which will help you in sorting your incomes and expenditures in a systematic manner. You can also split up the transactions categorically. Some of the popular budgeting software's available in the contemporary markets are:

o You Need A Budget

No budgeting software can get simpler than this. Easily affordable at a price tag of just $19.95, 'You Need A Budget' (YNAB) comes with 60 days money back guarantee. This software comprises of 3 spreadsheets, namely, Register, Budget and Overview. The first spreadsheet makes a record of all the incomes and expenses while the second one sorts the spending category as well as enters the budget for each month. The Overview reflects your personal income and also the average amount spent on each category. This budgeting software saves time and reduces stress. It also makes it easier for you to deal with fluctuating income and you can move on to save for unexpected or unaccounted expenses. The user manual explains you each action in detail and also provides logical reason as to why you should opt for it.

o PearBudget

Available originally to the users as a spreadsheet, PearBudget is now available as a web based online budgeting solution. You can use PearBudget irrespective of the operating system in your machine. If you have any of the following browsers, namely, Mozilla, Opera or Internet Explorer, it becomes even easier. Effortless to install and trouble-free to use, you can actually download PearBudget for a 30 days free trial without even disclosing your credit card information. This software helps you plan your budget by taking into account your expenses and it also gives you the option to import your budget as a CSV file. To get started, all you need to get done is to select the categories to divide your expenses. Furthermore you need to select the categories as regular monthly expenditures and irregular expenses and then enter your budget amount. The software will then proceed to calculate and let you know how much amount needs to be saved to meet the upcoming irregular expenses.

o Quicken

This budgeting software comes in four different versions and has gained extreme popularity because of being more user-friendly compared to the others. It is very easy to navigate through this software. The home page itself reflects the summary of your personally projected cash flow and all the other personal financial data is available in form of easy-to-read visual reports. The financial overview section contains data related to your savings schemes, income tax returns and fillings and also reflects your net worth. The details about your investments, home loans, automobiles loans can be seen under Investing and Property debt centre. The 2008 version of this software offers you an additional feature called 'My Savings Plan', which helps to roll over the surplus dollars automatically into next month's account. You can even track your PayPal account using Quicken.

Selecting proper budgeting software will play an important role in planning your future and also helps in savings and faster clearance of debt. So opt for the appropriate budgeting software and set out on the journey of financial stability.

If you want your budget to succeed over the long term there are eight things that might have an affect on your effectiveness to hold fast your budget. Identifying and conquering these things is essential to stay on the right track and achieving your budgeting objectives.

1. Neglecting to set an objective - A budget with no a goal will quickly fizzle out. You cannot truthfully expect to stick a budget for any period of time if you have not set a goal for it. Budgets are just like weight loss programs, they are simple to get started on but tricky to follow through to the end. You have to have constant inspiration - the objective you determine for your budget is your main source of encouragement.

2. Inability to make room for stimulation - Let's be truthful, daily life on a budget is not very exciting. Take away the pleasure and you'll dislike it a whole lot more. Main point here, save room in the budget for all the things you love and sit up for. You are much more apt to stick to your budget over the long haul if you can still enjoy yourself. Though it inevitably brings about living on a budget for a longer period than you had initially planned for, leave room for all the things you love inside your budget.

3. Over budgeting - Over budgeting is where you scale back too much from your budget, more or less depriving yourself of necessities in an effort to achieve your ultimate goal faster. This results in something I call "budget burnout", when that happens the budget goes right out the window. Bottom line, it's fine to scale back some but not so much that you're literally depriving yourself of what you require.

4. Sizeable sudden expense - Of course you aren't able to foresee when emergencies or unplanned obligations will come about; what you can do however is prepare yourself in case that one actually does happen. This is why it pays to get an emergency fund in place. An emergency fund should cover the unanticipated extra expense, your budget should be untouched and also you will not have to add additional debt unnecessarily.

5. Outgrowing the budget - You have obtained your goal and have finished everything you set out to accomplish with your budget. Congratulations! Budgeting has gotten you this far, so why not carry on? It's time for you to expand your horizons, think of a bigger, broader goal for yourself.

6. Unattainable goals/expectations - It's hopeless to keep to a budget that you set unreachable objectives or expectations for. You are usually just setting yourself up for frustration. You have to make a purpose for your budget that's measurable and most of all, plausible.

7. Neglecting to keep tabs on expenditures - Not monitoring your spending is the equivalent of shooting yourself in the foot. Tracking your expenses could appear challenging but it's not really. Understanding exactly where the money is going keeps you in control and makes it far easier to continue inside the limitations of your budget.

8. Giving in to impulse - This is often sort of a hard one to get under control, you just never know when you are going to be enticed. If you sense the need to shop or expend money impulsively try to use the need vs want rule (ask yourself "do I need it or do I just want it?"). If that fails you could also use the 2 day rule in which you wait a couple of days, if you sill feel that you NEED it following two days - go on and buy it.

Many of us have negative connotations associated to the word budget. We feel it is restricting, not allowing us the freedom to spend our hard earned money the way we choose. We view budget as something which needs to be done by those who are struggling financially. Budgeting, however, is a fundamental concept which must be adhered to if financial success is to be achieved. Having a budget is a common characteristic among those who have earned their financial success. The lack of a budget is a common theme, typically, among those who are struggling financially. Budgeting isn't punishment for not being wealthy. A budget is a means to determine where your money is going, something we all need to be able to do. Creating a budget is a way to determine whether you are spending more than you make. At the heart of financial success is spending less than you make. You simply can't spend more than you make, at least not for long. So, what are the basics? The two fundamental questions to answer when creating a budget are; "What's going out?" and "What's coming in?"

The place to start creating a budget is figuring out where your money is going right now. There are a number of ways this can be done. You have to discover what works for you. I have tried different approaches to tracking expenses, computer software, spreadsheets, notepad, and check register. I have found a simple excel spreadsheet works best for me. Easily customizable, spreadsheets do the calculations I need and I can input the information in a manner that best suits my needs. You can start inputting entries from bank statements, credit card statements or from where ever you can obtain the information for the budget. Track you spending for about a month. Adding up the amounts will give you a good idea about your spending habits. A few guidelines in setting up your spreadsheet are listed below:

o Typical categories are housing, food, recurring bills, and entertainment.

o Categories should fit your lifestyle. Include those areas of spending that are unique to you.

o Account for the once or twice a year expenses such as auto insurance and taxes.

The next area to address is what's coming in. Determine your monthly income including wages, interest income, dividends, and bonuses. Once you know how much you make and how where you are spending the money, you've got a budget. Adjust the spending until you achieve balance between your income and expenses. Your goal with the spreadsheet is to fine tune it until you have a line item for all the income and all the expenses you incur. This fine tuning process will highlight areas of spending which may be out of your perceived spending plan. By having setup the budget you are now equipped to make the adjustments needed to bring about financial success.

The final step is to get into the habit of budgeting. To be successful this will take persistence. You will have a number of slip ups along the way. Don't be discouraged by this. The goal is not perfection in record keeping, but, rather money management. Here are some tidbits to help you on your journey.

o If you can't spend less to bring balance between income and expenses, earn more.

o Pay cash whenever possible and record the transaction.

o Develop a habit of thinking ahead. Plan for upcoming situations and prepare for it.

o Keep good records. If you don't write it down, chances are you won't stick to it.

o As your finances change so should your budget. View the budget as a living document that changes with you.

Creating a budget is advantageous when planning for your financial future. The budget is really a tool to determine spending patterns and habits. A budget is a way in which you can take control of cash flow. An excel spreadsheet or computer software can be a viable resource when creating a budget.

Most budgets are created by taking the previous budget, comparing it to the actual expenses, adding in anticipated new programs, and often merely adjusting the numbers by an estimated percentage, often based on the cost of living, or some other factor. While this is the prevalent method used in budget preparation, many people, including me, feel it is not the most effective way to create a budget. The use of the traditional budgeting method has also created a widespread attitude, by many, that the budgeting process is merely an exercise, rather than a valuable financial tool, that it should be.

Conventional budget preparation techniques often do not evaluate the value of programs, nor do they assist in the prioritization that organizations and other entities should perform to make them as effective as possible. Organizations need to plan on an ongoing and continuous basis, if they are to evolve as they must to strive and survive. They need to evaluate how they spend their money, on a regular basis, to assure that their organization is getting the most "bang for the buck." Often, it is not necessarily the amount of money that an organization spends, but rather how it spends its money. Generally, an evaluation of an organization's budget, as well as its Profit and Loss Statement, indicates that there are times when more should be spent on certain items, while there are also situations when there should be less monies spent on other specific items.

Zero-based budgets force its preparers to look more deeply into its budget. In following this technique and methodology, an organization will use a budget not only as a financial exercise and guideline, but also as a serious forecasting, planning and action/ result related document. Organizations that utilize zero-based budgeting must look at how they are presently spending money, line item by line item, and ask important questions. Doing this, organizations ask whether they are prioritizing their programs and expenditures in the most efficacious manner. They look at each of their programs, evaluate them, and determine if they should be continued. This causes the organization to discuss and decide whether more or less monies should be spent on each item than previously. This helps create a focus where organizations are better able to think about its future direction, and creates a form of "thinking outside the box."

When zero-based budgeting is not performed, organizations often continue spending money ("good money after bad") on programs that may no longer be relevant, or simply are not a "good fit" for the organization. Often, that money could be better spent in other areas, and since most organizations do not have unlimited revenue, they must carefully spend their funds. Evaluation of a budget via zero-based technique integrates an evaluation of finances and how they align with the organization's mission and purpose.

Zero-based budgeting is often misunderstood and misconstrued by untrained leaders, who may have simply heard that zero-based budgeting is good. These individuals often do not understand what it truly represents. The single biggest misconception that I have observed, on several occasions, is when an organization's treasurer or budget officer says he has prepared his budget using zero-based budgeting. Rather, what has often been done is that the treasurer takes it to mean that a specific amount is allocated in a specific area, and that whoever in the organization responsible for that area, then has the right to determine how to spend the money, within those budgeted constraints. However, zero-based does not mean that one must spend the monies in a specific area, if some cost savings is found, that accomplishes what needs to be done for less expense.

I urge all organizations to consider the use of zero-based budgeting. In order to do that effectively, effective usage of budgets, and fiscal responsibility should be part of the curriculum of the organization's leadership training.

For many years, I've been a fan of what is known as a Flexible Budget. This is not flexible budgeting in the sense that the government uses - "No money in the budget? Hey, we're flexible. Spend away!"

No, a flexible budget is actually a very useful management tool which brings a new level of clarity to budget-to-actual analysis. In essence, it allows a transparent look at budget-to-actual results for variable costs-generally "direct" costs - by eliminating the sales variance component.

If direct costs (Labor, Materials & Freight) are budgeted for on a percentage of sales basis, then we can easily create a Flexible Budget to analyze how well we performed in each class of direct costs.

Since we will never hit our budgeted Sales level exactly, the variation in actual Sales vs. budget can cloud our assessment of how we did on the direct cost budget. The larger the Sales variation, the more potential there is to reach an inaccurate conclusion.

The flex budget determines "What should direct costs be for a given level of sales?"

As an example, we'll create our budget with an assumption that Sales are projected to be $1,000 and Materials costs are 50% of Sales, or $500. At the end of the month, if actual Sales are $1,500 and Materials costs are $550, how did we do? If we look at Materials costs in the traditional Budget vs. Actual report, it looks like an unfavorable variance of (50). But how much of that is due to the Sales variance, and how much is truly a materials variance?

Using the Flex budget, we 'reset' the direct costs budget (it's flexible) to show ACTUAL Sales x the budgeted PERCENTAGE of Sales. Based on Sales of $1,500 our Materials budget changes to $750 instead of the original $500 - Sales were 50% higher than budget, so we should expect to use 50% more materials. Now we see the true materials variance is actually a Favorable $200, as opposed to an Unfavorable $50.

The Materials Manager just went from getting fired to getting a bonus.

The flex budget really brings clarity to management's performance on variable costs and eliminates the co-mingling of sales (volume) variances and usage or efficiency variances. Both reports are useful for different types of analysis. And the Flexible Budget can be an important tool in the analysis toolbox.

Personal budgets are hard, right? They are complicated: you need to be a computer programmer to figure it out, right? Wrong. A personal budget can be as complicated or as simple as you want to make it, so make it simple by following the one column solution.

The one column personal budget solution is exactly what it sounds like: you have one column on your budget for every time you get paid, and that’s it.

Let’s look at an example. Let’s say you get paid $500 every week. Your rent of $600 is due on the first of every month. Your car insurance of $200 is due on the 20th of every month. Your $100 hydro bill is due on the 10th, and you buy food and put gas in your car every week. How can you budget to make sure you pay all of your bills on time?

Simple. Use one column for every paycheck. By doing this, you are not trying to budget for an entire month, you are only budgeting for one week. Your one column budget will show $500 at the top of the column for your paycheck, and then it will have your expenses listed by the week.

Your one column personal budget will show your rent as $150 per week (one quarter of your $600 monthly rent), car insurance as $50 per week (one quarter of $200 per month), hydro as $25 per week (one quarter of $100 per month), and food and gas for your car at whatever you spend each week.

The big advantage of the one column budget solution is that you are setting aside money every week, so you are never short. At the start of the month you start setting aside money for the month; that way when rent is due, the money is already in the bank. No stress, no problems. How easy is that?

Remember, if you don’t follow the one column solution to make a simple budget, you could find your spending out of control. That can lead to bankruptcy, so remember, a proper personal budget is the best bankruptcy alternative.

If you stick to the one column solution, your budget, and your life, will be much easier and less stressful, so don’t wait, get started today!

Creating a budget is a fantastic first step in getting your financial situation under control, especially if you are currently having money troubles. Unfortunately just creating a budget is no guarantee that your money situation will turn around - you need to be able to stick to it. There are many reasons why a budget may ultimately fail. Here are the three most common problems, and what you can do to overcome those problems.

1) The budget is unrealistic.

It's very easy to come up with a budget that looks fantastic. The numbers say that you can save hundreds a month and be debt free within a year or two. That's great - as long as the numbers are realistic!

The worst thing you can do when creating a budget is put in unrealistic numbers. It's very easy to do this accidentally (by now realizing how much certain expenses really are, or even leaving out some expenses entirely because they are "uncommon"), but sometimes an element of wishful thinking can creep in as well. Needless to say, if the budget is unrealistic there is no way it can work. Take a few extra minutes to make sure the budget actually represents reality (even if it is an ugly reality), and you will be able to benefit from using the budget.

2) The budget doesn't have buy-in.

If you live by yourself, setting a budget doesn't require you to talk to anyone else. But if you have a partner or family, the worst thing you can do is suddenly turn around one day and say "you can only spend $X on this now". At best you'll get an argument. At worst your partner and/or family will begin to resent this new budget you've forced on them, and may even begin to ignore or sabotage it.

Instead of making a budget decree, it is essential that you get buy-in from others in your family when putting together your budget. Get everyone involved in looking at the figures, and working out how much money can be allocated to each area. If people know the entire situation, they will realize that you're not just trying to ruin their fun or arbitrarily cut their money. Instead everyone can work together to better the financial situation.

3) The budget doesn't allow fun.

When coming up with a budget, it's very easy to scrutinize every single cent you spend and strike off every item that is some sort of luxury or "fun" item. While this can make your budgets figures look good, it is ultimately a losing situation. The budget will very quickly change from a benefit to a grindstone. When this happens, it is very easy to start spending extra money on the fun items you miss ("I've been good, just one little extra won't hurt") but aren't in the budget. And since they aren't in the budget, this gets you into the habit of ignoring the budget in other areas.

The solution is to ensure that any budget you create includes some money set aside just for fun. Whether it's a meal out, money to go to the movies or just an amount you can spend guilt-free on shopping, you need to allocate this money for the fun so the budget you create can be maintained. Of course, this amount of money needs to be set like any other part of your budget, and once you set the amount you must stick to it.

Now that you are aware of the three most common reasons that a budget can fail, you are in the perfect position to ensure it doesn't happen to you. A budget is the first step in getting control of your financial situation. Use it wisely by avoiding these common mistakes, and you will reap the rewards.

Lots of people fail to see why a budget is a good thing. It may seem as if being put on a budget says that you don't make enough money or make wrong choices. Actually, being on a budget says that you make the right choices. For now and for the future.

So why should you budget?

1. A budget gives you the ability to control your money. Your money doesn't control you when you say where it goes. You choose to make the choices. If your money is controlling you, you are choosing not to choose where your money goes. You aren't making the decisions. But you make that choice.

2. A budget not only lets you know what you are spending, it helps you to live below your means. You know if you are spending more than you make. You are able to look at your spending to see how you can make it fit your income. Your income will never fit your spending on its own, so you have to adjust your spending first.

3. A budget is more than what you are spending and where. It is your goals and plans and spending. If you don't have guidelines for your goals and plans, you probably won't reach them. You need to know what you need to get where you are going. This is essential to being able to retire comfortably, pay for your children's education and enjoy a carefree life.

4. A realistic budget frees up money for you. You are able to spend your money on things you really want instead of wasting it on things you don't remember buying. If you have ever looked in your wallet and wonder where you spent all of your cash today, you need to have a budget. After all, fifty bucks can slip through your fingers rather quickly.

5. A budget can improve your marriage or relationship. If the two of you stick to the budget, it will bring you together. You are working with each other towards common goals. Arguments about money will be lessened. You are showing that you respect each other's wants and needs by spending with the other person in mind.

6. A budget helps you get out of debt. It also helps you to stop from creating debt. Your saving goals are very important. For every dollar you spend on a credit card, you are cutting thousands out of your savings. Look at how fast your savings can add up. Look at how long it can take you to pay off your debt. It is easy to see that you should make a plan to pay off the debt and put your money to work for you, not against you.

7. A budget can improve the quality of your life. You have a plan. You no longer have to lie awake wondering how you will make ends meet. Your budget lays things out for you. Your less stressed and able to enjoy life a little more.

Budgeting is a really good thing. Actually, the reasons are endless. My family started budgeting to get out of debt. We found that you can have the things you really want. And not have to sacrifice for them. No more sleepless nights and no more arguments about how to fix things. And we are looking towards a happy retirement.

In an attempt to illustrate math concepts and to help math students understand how math is used in the real world, I would like to show how exponents are used to represent really HUGE numbers. As an example, I will use the Proposed 2011 U.S. Federal Government Budget and the projected annual deficit it will leave in its wake.

Let's start with a definition of the U.S. Budget Deficit. (Not to be confuse with the U.S. Trade Deficit.) The U.S. Budget Deficit can be represented by a simple formula or equation, as follows:

REVENUES minus OUTLAYS = Budget SURPLUS or Budget DEFICIT.

When this formula is equal to zero, that is when "Revenues" = "Outlays", then the budget is said to be "Balanced". The Fiscal Commission has been put in charge to do this by 2015. When this formula is positive, meaning when "Revenues" are greater than "Outlays", the result is a Budget Surplus. However, when this equation is negative, that is, when government "OUTLAYS" are more than its "REVENUES", then this creates a Budget Deficit. Each year, it is a very difficult task for the current administration to "Balance the Budget". The current Fiscal Commission under the Obama Administration has been charged with the task of providing a Balance Budget by 2015. It remains to be seen, whether the Fiscal Commission will be able to accomplish this directive. Already, disclaimers are being issued as to the unlikelihood of this event actually coming to pass, due to our current economic condition.

To understand this concept of a "Budget Deficit" a bit more, let's look at the terms "Revenues" and "Outlays". Every year, the U.S. federal government publishes its projected Revenues (money to be received) compared to its proposed Outlays (money to be spent on government goods and services) for the upcoming fiscal year. "Revenues" are the monies coming into the Treasury from various sources such as income taxes, other various taxes, borrowing and other financing techniques.

"Outlays" are the government expenditures which pay for all the government programs such as defense, education, highways, economic recovery, social security benefits, job creation programs, the new health care program and many, many more goods and services as well as interest payments on previous years' government debt. Two of the most contested issues among politicians are (1) "Just how much should our federal government require us (its citizens) to pay in the form of taxes especially Federal Income Taxes?" and (2) "Just how big should our federal government be?" The former question is generally thought to be related to the "REVENUES" side of the formula while the latter question is usually related to the "OUTLAYS" term of the equation.

Below are the specifics underlying the Proposed 2011 U.S. Budget:

2011 Budgeted REVENUES are $2.5 Trillion
Less
2011 Budgeted OUTLAYS are $3.8 Trillion
Equals
Budget Deficit ( $1.3 Trillion).

Written as a number (without decimals and the word "TRILLION"), it looks like this:
$1,300,000,000,000!

Just how BIG is 1.3 Trillion dollars?

Consider this:
$1 - one dollar has no zeros.
$10 - Ten dollars has one zero.
$100 - One hundred dollars has two zeros.

$1 Thousand has 3 zeros, written as $1,000.
$1 Million has 6 zeros, written as $1,000,000
$1 Billion has 9 zeros, written as $1,000,000,000
$1 Trillion has 12 zeros, written as $1,000,000,000,000

Oh by the way, the number after the decimal, ".3", is not insignificant either, it is
equal to $300 Billion dollars, more than one thousand times the amount that Oprah Winfrey made in 2008, which was approximately $260 Million!

Using exponents
1 Thousand = 1,000 = 10^3 (where "^" is the exponent sign on most computer keyboards)
1 Million = 1,000,000 = 10^6
1 Billion = 1,000,000,000 = 10^9
1 Trillion = 1,000,000,000,000 = 10^12

Another way to conceptualize this is shown below:
1 Million is 1,000 thousands
1 Billion is 1,000 millions
1 Trillion is 1000 billions.

So if you could find one-thousand billionaires willing to pay 1.3 billion dollars ($1,300,000,000) each... That would pay off ONLY the 2011 deficit. It does not address the previous years' deficit and/or the current national debt that the federal government has amassed since 1789!!!

Can't find 1,000 billionaires? How many billionaires like Bill Gates do you know, anyway?...probably not a thousand!

Then let's look for Millionaires. It would take only one-million millionaires to pay 1.3 million dollars ($1,300,000) each, in order to pay off the planned 2011 budget deficit!

Let's pause for a quick math help tip here.
Note: 1 trillion = 1 million times 1 million = 1 million squared!
Or 1,000,000,000,000 = 1,000,000 x 1,000,000 = 1,000,000^2
Or 10^12 = 10^6 x 10^6 = (10^6)^2
All that is being said here is that a trillion is a million millions! And yet the projected U.S. Budget Deficit for 2011 is even LARGER!!! 30% larger or 1.3 Trillion Dollars!

Can't find 1,000,000 Millionaires? How many millionaires like Oprah do you know, anyway?... probably not a million of them!

How about each and every U.S. citizen, which is approximately 300 million people (300,000,000) of us? If you and every one of us, I mean everyone regardless of age or income level, could pay an extra $4,333.33 more than we already pay in various taxes, then the budget would be balanced (Money In = Money Out). Can you afford an extra $4,333? Most people can't!

The intention here is to help online math students understand the complexity and the enormity of the U.S. Budget Deficit, not just from a mathematical viewpoint but from social, economical and political aspects as well.

The one management task that most IT managers fear the most is the process of creating a new budget for their team. One of the reasons that I believe that this critical task is feared so much is simply because most IT managers don't realize that there are many different types of budgets that they can create. Once you know the 3 main types of budgets that exist, picking one to create becomes much easier.

Short vs Long Term

Traditionally, the spending plans that most IT managers create for their team are 12-month budgets that lay out the money that their team is going to need during the next year. This is the way that spending plans have been traditionally done.

However, it is slowly being realized by many businesses that new types of budgets are called for. There is a need for both short-term and long-term spending plans.

Long term budgets cover a time period that is longer than the traditional 12 months. The reason that your IT team may need a long term spending plan would be if the project (or projects) that you'll be working on will take longer than 12 months to complete. By creating a longer-term spending plan you'll be able to request the funds that you'll need in order to complete your IT project.

On the other hand, if your company is in the middle of a budget crunch - perhaps it's a startup, perhaps times are just tough, then a traditional 12-month budget just won't do. Instead, a spending plan that is as short as a single month may be required.

Fixed vs Rolling

We are all used to a fixed budget. Once again, a fixed spending plan generally covers a 12 month period that makes up a single year. We run around at the beginning of the year and try to determine how much funding our team will need. We submit a request, it gets approved, and that's pretty much it for the rest of the year.

A rolling budget is completely different. A rolling spending plan starts out the same way that a fixed spending plan does. However, a rolling budget always covers the same amount of time (let's say 12 months). That means that once you're a month into it, it's time to create a new spending plan that extends one more month out.

As you can see this allows a rolling budget to quickly adapt to changes in the environment that your IT team is operating in. However, you're going to end up spending a lot more time working on budgets.

Incremental vs Zero-Based Budgeting

We all know that that prices go up over time. What this means when you are creating a budget for your IT team is that next year's budget will probably be incrementally larger than this year's budget. This type of incremental budget can be easy to pull together - just increase how much you are asking for in each area.

Zero-based budgeting on the other hand takes a completely different approach. When you are creating a zero-based budget, you start the budgeting process with no pre-existing budget. Instead, you start from nothing and construct the budget that you think that your IT team is going to need for the year ahead.

Zero-based budgeting is a great idea for firms that want to shake things up. It prevents IT managers from automatically boosting the amount of money that they request each year by some fixed amount. However, the downside is that zero-based budgeting requires a great deal of time on the part of the IT manager. Creating a whole new budget from the ground up is a major task.

What All Of This Means For You

Creating a budget for their team is a critical part of the leadership that it takes in order to be an IT manager. What all too many IT managers don't realize is that there are many different types of budgets that they can create in order to fund the activities of their IT dream team.

The length of time that a budget covers can distinguish a short term budget from a long term budget. How long a budget will last is another differentiating factor. Fixed budgets cover a fixed amount of time while rolling budgets are constantly updated. Finally, when you create your next budget you may choose to do it in a incremental fashion or starting all over using a zero-based approach.

No matter how you choose to create your next budget, simply knowing that there are multiple types of budgets can be a big help. Every IT team is different and the different types of budgets can help you match your budget to the needs of your team.

The "B" word sends a shudder down the spine of many people. It conjures up fears of never being able to do anything with their money. That it is somehow locked up in this budget and cannot be used for anything else. That in fact is not the case. A household budget is simply a way to see where all your money is going. And more importantly to give you a plan that tells your money what it is supposed to be doing, whether that's paying bills, going into savings or retirement accounts, or to buy groceries.

Every successful business or person has a money plan. This is what a budget is, a plan for your money, telling it what to do instead of it telling you what to do. With a budget you can set and achieve your financial goals. You can also get a better view of what your money can do for you now and in the future.

With a household budget you can create a spending and savings plan that puts aside a certain amount of money each month for known and unexpected expenses. It will also give you a good record of your monthly expenses based on each month's expenditures.

The first thing you need to do when setting up a budget is figure out what your monthly income is. If you have a salaried job this is easy because it is a set amount each pay period. If you work on commissions or are self employed this may be more of an estimate. Write this number down at the top of your budget sheet.

Now comes the fun part. Start writing down all your monthly expenses and include even the smallest of expenses. There are certain fixed expenses such as mortgage, car payments, insurance that you need to make every month. You will also need to track those expenses that are more fluid, such as groceries, gasoline, clothing, and entertainment.

If you start by subtracting your fixed expenses from your income what you are left with needs to be budgeted to pay for those expenses that seem to change from month to month. Once you are done allocating money to all your expenses what you are left with is either a positive or negative cash flow. The nice thing about a budget is you can quickly scan what you have written down and see exactly where the money is going. This is very helpful if you are living pay check to pay check because chances are you can find some areas that you can easily cut back on or do without to leave you with extra cash at the end of every month.

Here are four quick tips to help get your budget on track.

1. Learn money management - Successfully dealing with money is 80% behavior. Most people work for their money instead of having their money work for them.

2. Make a plan - A budget is a money plan. Most people would never dream of building a house without a plan. In fact most every activity in life involves some sort of plan. But our most important asset, our money, is left plan free and when we run out or are weighed down with debt we don't know why.

3. Needs and Want - Know the difference. Needs are basic things like a home with a roof, groceries, clothes (in moderation), transportation to get to work. You don't need a $400 plus car payment to get to work or a pair of $100 designer jeans. You may want them but you don't need them.

4. Be a little frugal - This doesn't mean live in a cave. You can still have fun but make sure it fits into you budget.

Creating a household budget is the first step to getting your finances under control. You will have to be patient with the process because chances are it will not work the first 2 to 3 months you do it. But remain diligent and around the third month you will begin to see patterns that will help you refine your budget into a financial plan that will set you on the right path.

Are you one of those, who find it hard to save on their monthly income? Looking for some ways that will aid you to manage your monthly budget and expenditure effectively, in order to meet all the needs of your family? If yes, then the budget planner is a must for you. With the great wave of current recession, it is essential to understand the importance of saving money.

It's true that the voyage towards a stable financial future is quite tricky and lengthy; however, it is not impossible at all. If you have the right budget planner in your hand, you can do it in a quite effective approach. Surely, your journey towards budgeting and savings will be swift and soothing.

First of all, it is essential to understand the steps to learn where you expend your earnings and what are the ways to spend more effectively? A budgeting plan can be very helpful for you in this regard. It is a simple sheet known as a budget worksheet.

Free budgeting planners are very beneficial as:

1) They aid us to envision how much we have, where we are spending the money and where you can save your expenditure. Some prefer to go for their existing computer programs like Adobe office suit or Excel and make use of budget sheets templates.

2) Today, with the advent of internet, you can search online for different things. Now, various software programs ease our day to tasks. You can search for online free budget planners, which will make it easy for you to budget your money.

3) With free budget planners, you can have better control over your expenditure. This can help you to avoid insignificant purchases.

If you are interested in a secure financial picture for your future, then it is essential to understand the importance of planning budget. Free budget plan worksheet are printable will ease your task. This can be excellent option to achieve your monetary goals.

All in all free budget planners are quite helpful for you. Just seek for one that suits your needs and be ready to enjoy the great benefits offered by it.

Creating a basic household budget is one of the most important steps anyone can take to improve his or her long term financial stability. Matching income to expenses through the use of a monthly budget is a great way to understand just where your money is going, and to get a handle on unneeded expenditures.

Given the many advantages of the household budget, it is strange indeed that more people do not take the time and effort create this most basic of all financial documents. However, most people do not create a budget, and that is a shame.

Creating a budget is very important, however. It is no secret that more and more consumers are carrying more and more debt than ever before, and that personal savings rates have rarely been lower. While not all of this is the result of failure to budget correctly, it is a good bet that if everyone had a monthly budget these numbers would be quite different.

Many people think that creating a monthly budget is difficult or very complicated. While a budget can certainly be a complicated document, and the budgets put together by corporation and other business Rae quite detailed, a personal budget can actually be quite simple to create and use.

In its simplest form, a budget is simply a representation of the monthly income and expenses for an individual, family or household. Creating a monthly budget can be as simple as using a simple spreadsheet program to record the monthly amount of income from your job, and the amounts spent in a number of different categories each month.

When creating a household budget, a good place to start is by carefully tracking all your expenses for a month. This exercise will not only give you a real insight into where your money is really going, but it will also give you a good idea of the categories you should use when creating your budget spreadsheet.

After the budget spreadsheet has been set up, continue to track your expenses carefully each month, and add categories as necessary. Seeing your monthly living expenses in black and white is a great way to keep them under control.

More

The "B" Word: Budgeting

When it comes to financial fitness, a sound, practical budget is required no matter what your goals are. While some have decided the envelope system of budgeting is no longer useful as we don't use cash very often, there are still tools out there to help.

A budget is simply defined as a method to organize your spending. Some of us find just listing our monthly expenses and projected costs based on previous months will be the most helpful. A budget needs to show you what your spending patterns are, and mentally adding up your expenses is not going to give you a clear picture.

The Envelope System:

To use any budgeting system effectively you need to know how it works. We understand the premise behind budgeting; however the specific system you use can have different basics. The envelope budget is an older style for creating your household budget. It worked fifty years ago when it was created because most of our household needs were paid by cash.

The premise behind the envelope system is this:

You will have an envelope for every spending category. So you should have envelopes for rent, food, transportation, and so on. Then you take your pay check and cash it. The cash is going to go into the envelopes based on how much you feel will be needed for that specific category. For example if you know or estimate you will have $80 dollars for the electric bill for the week you would need to put that amount in the envelope. Then you would use this money for your bill. If the electric bill is more than you budgeted for you would have to borrow from another envelope and replace it in the next pay period. The electric bill is usually a monthly expense so in reality you should budget a weekly amount to total what you expect the bill to be. If the bill is lower than expected you would have savings in that category for the next month or to use in case of a shortage elsewhere.

Does the Envelope Budget System Work in Today's Mostly Cashless Society?

Many consumers don't feel the envelope system budget works, but this isn't really accurate. You just need to make it work for the current market. Many of us use debit cards linked to our checking account. You can modify the envelope system to work for use with debit cards.

One way to modify the system is to use a "pretend" envelope budget, in which you place a paper receipt for that category. This receipt would tell you how much money you placed in there for the week. This way when you go shopping or pay bills you can see how much you allotted for that specific category. If you go over you would then need to use money from another envelope.

To use the envelope system of budgeting in this day and age it takes a lot of discipline. You need to make sure you either use cash for your bills or that you use a "simulated" cash system. It is easier to go over in the store with a credit card. In fact several individuals are beginning to use cash just to stay within budget because other budgets don't work as well. If you are struggling with overspending, you might try the envelope budget using the true cash-based budgeting system, the envelope.

It is very important to determine a budget for any home improvement project, and kitchen remodeling is no exception.

A word of caution: I spent several hours researching kitchen remodeling cost and budgeting on the internet to gather data for this article. I ran into a couple websites that gave square footage pricing for kitchen remodeling. Although I commiserate with their attempt to find a simple method to figure out remodeling pricing, this type of advice is not based in reality. Remodeling jobs in general are so specific to the conditions of the building and tastes of the homeowner that no square footage pricing will ever be realistic. I also ran into many sites that did not give you any real information about establishing a budget but basically interpreted Hanley Wood's Remodeling Cost vs. Value report which is published each year. You are much better off visiting the Cost vs. Value report online and evaluating the results for yourself.

Like anything else in this world a kitchen remodel is going to cost more than you thought it would and the sky is the limit on what it can cost depending on your tastes. There are multiple factors that go into determining a remodeling budget.

There are several places online you can go to help you establish a basic budget number to start with. My personal recommendation is Remodeling Magazine's Cost vs. Value Report which is released by region and major city each year. The really nice thing about this report is that it gives a description of the "average" project so that you can gauge if your kitchen remodel is going to fall above or below the benchmark. I also find their average pricing to be an accurate reflection of the pricing for our company, so by recommending to clients before I even meet with them that they investigate this report they are more likely to establish a realistic budget we can work within to give them a fantastic kitchen.

Custom Hutch built with Semi-Custom Cabinets

While Remodeling Magazine's report is very helpful, it is still a very one size fits all approach to establishing a budget. Keep reading if you'd like to try to hone your numbers a bit.

Get out a pad and paper and jot down a few notes about each factor as you go through this list:

Factor 1 Home Value- Consider not only what you think your home is worth, but also the value of similar homes in your neighborhood that already have updates. My favorite website to check home values is zillow.com, simply enter your address and you get an interactive map with home values and other information listed right on the map. Take note of which homes are of similar size to yours, have been purchased more recently, but have a higher value, then peek in their windows to see what the house looks like. Ok, seriously, I was only kidding. If you don't know them perhaps it's time to meet the neighbors and ask for a quick tour.

Factor 2 Wow! - This has everything to do with your goals and motivations. Write down each motivational factor which is important to you in a kitchen remodel. Here are some possible examples: Kitchen is falling apart. You love to cook and the layout doesn't suit you. You love to entertain and want to open up the kitchen as a place to gather. You want a kitchen that wows your guests. You are getting ready to sell your home and the kitchen is a sticking point with buyers... Now that you have your list, evaluate which motivations are most important and relist them in motivational order. Imagining your budget starting in "the middle" take note of which factors might move the budget up or down...i.e. wanting to remodel to encourage a sale might move the budget down, remodeling to wow guest might max it out...etc.

Factor 3 Did someone say AGA? - List any "must haves" for a kitchen remodel to be worth it to you. Possible examples: granite counters, an island with an extra sink, a second dishwasher, a commercial quality gas range, etc.

Factor 4 Longevity- Determine to the best of your ability the length of time you plan on owning the home.

Factor 5 Size Matters- Determine what percentage of your home your kitchen encompasses. A sampling of over 100 modern home floorplans of 1000 to 3000 square foot homes revealed the average kitchen square footage to be 7% of the home's square footage. If your kitchen is larger or smaller than this average you may need to increase or decrease your budget accordingly.

Factor 6 Layout- if you already know you're going to want the sink moved, an island sink added, an interior wall moved and an exterior door added, then you need to add money to your budget well beyond what a basic facelift would cost.

Tricky layout: the decorative column conceals a sound wrapped drain pipe

Factor 7 Funding- Determine the maximum amount of money you could afford to spend. If you are financing your project you can calculate what a lender will likely lend you. Lenders want to see a debt to income ratio(DTI) of.36 or less. Your DTI is established by taking all your monthly debt obligations (credit card payments, auto loans, mortgage, etc.) and dividing by your monthly income. To determine your maximum safe monthly debt multiply.36 times your monthly income. Now subtract your existing monthly debt from this number and you have a monthly budget maximum. Here's a link to a calculator that will do the math for you: mortgage calculator

Putting it All Together

The key to determining your budget is finding the percentage of your home's value you should use as a budget guideline. While researching this article I ran across recommendations to use percentages ranging from 10% to 25% of home value. For a kitchen remodel of any substance that includes new flooring, appliances, cabinets, sink/faucet, lighting and bringing electric up to code I find anything less than 15% to be a very dubious number. I suppose on a million dollar house 10% would be a workable budget, but on a 200k house a 20k budget is marginal at best for a full blown kitchen remodel.

If resale value is important to you it is wise to keept the cost of your kitchen renovation project within 20% of the current value of your home. Staying within this range insures that a majority of the new kitchen's cost is recouped in increased home value immediately, and the remaining cost should be recouped within 5 years as your home appreciates.

Ok, let's run through an example. Keep in mind, there is no exact formula here. We are simply doing our best to be as informed as possible and make a wise decision about how much to spend on our kitchen remodel.

For our example let's use my house. It's a 50's cape cod with a modest square footage of 1500.

Factor 1 value: Zillow gives me an estimated value of $167,500, however, I notice zillow hasn't yet updated and accounted for the single family homes which were recently built in the field behind us with a starting price of $270k. Zillow also has our square footage listed at under 1200. Looks like the previous owner did a little remodeling without a permit. I'm going to base my budget on a price of 180k which is similar to other houses in the neighborhood that are the same size.

Factor 2 Goals: My wife and I love to entertain guests. To make a kitchen remodel worthwhile for us we need to lose an interior wall to open up the kitchen and dining nook to the living room. I'm going to add 1% to budget for this.

Factor 3 Must Haves: As a former chef two must haves for me are a new oven and a really nice propane range(no natural gas service here), preferably a commercial range modified for home use (real commercial ranges don't have insulation around the oven, critical for home safety). I'm going to add another 1% to my budget to make sure there is enough money to get me my range and propane installation.

Factor 4 Longevity: We plan to stay in our house a minimum of 4 years. As a rule of thumb it takes 5 years for most remodeling to appreciate and recoup all of its cost. Since we will likely be here at least 5 years I'm not going to penalize the budget, but since there is a good chance we'll move right around 5 years I'm not going to increase it like I would if we were staying much longer.

Factor 5 Size of Kitchen: Our kitchen is about 140SquareFeet(SF). That's over 9% of the SF of the house, 2% above average. Obviously this kitchen is going to require some extra material and cabinets. I'm going to up the budget 1% for this, I hope it's enough.

Factor 6 Layout: We are going to change the layout of our kitchen pretty extensively. We currently have a cooktop peninsula. The range is going to go on a differnet wall and the dishwasher will move to the peninsula, though we might ditch the peninsula, move the fridge and add an island instead. About the only thing that won't move is the sink. I'm going to add another 1% to my budget, again hoping $1800 (1% of our 180k value) is enough to cover the electrical and plumbing changes.

For my base I'm going to use 20%. As I mentioned before, there are going to be people who will argue with me on that, but going lower often doesn't leave you with workable budget numbers for full blown kitchen remodels. I'm adding 4% based on my factors listed above. I adjusted my zillow.com estimated home value to 180k based on the comparable square footage and value of other homes around me. This gives me a working budget of 24% x 180k= $43,200 When I compare this to the Cost Vs. Value report I see that in the Middle Atlantic Region a Major Kitchen Renovation is $59, 098. It looks like my budget could be bit low, especially since I really would like granite countertops and the Cost Vs. Value specs call for laminate tops. On the other hand my kitchen is significantly smaller than their 200SF benchmark, so I think I'll go with my budget number and see what my contractor can do for me in that budget.

Please note that I ignored Factor 7 Available Funds. Obviously Factor 7 either makes or breaks budget numbers and there is no point in discussing it here.

Good luck with your kitchen remodeling project!