Budgeting

I don't think there are many people who enjoy budgeting. As a matter of fact, for some people, budgeting is probably as much fun as doing your taxes. The good news is that budgeting, whilst not much fun is definitely worthwhile, leading to more savings, less debt and best of all less stress about your finances.

People often do not budget because they find it to be an easy process. Where do you start? What tools do I use? What do I budget for? These are very common questions and when you sit down and don't know the answers to these questions, the easiest thing to do is nothing. Then come the usual excuses, budgeting, it's too hard or budgeting, I'll get around to that another time. Let me tell you, if you get past the initial hurdles and understand how to budget, your finance fortunes will be better off.

It would far to say, that people do not fully understand how much they spend until they understand how much they spend. That may sound a little strange but if you read it again and think about it, it does make sense.

If you don't sit down and complete a budget, how do you really know where your money is going every pay period? Do you really know how much you're saving or more importantly whether you're spending more than you earn? Nowadays, it is common place for people to live beyond their means because they have credit cards which allows it.....then the banks charge big interest rates for the privilege of letting you get deeper and deeper into debt.

How many people get to the end of their pay period, "hanging out" for their next pay day - this is not a good way to live your life and will mean you will continue to be controlled by your finances instead of controlling your finances.

People who are financially successful in life usually have strong control over their finances and understand how they spend their well earned money. People who are able to save are usually able to reduce their mortgages quicker, don't have high credit cards debts and enjoy a higher level of disposable income and definitely less stress.

Imagine reducing the time in takes to pay off your mortgage by 5 years - what would that mean to you? Here are a couple of examples to illustrate how you can reduce the term of your mortgage by 5 years and the amount of interest you'll save in the process:

Example 1

Loan amount $300,000

Interest rate 7.99%

Term of loan 25 years

Weekly repayment $533

Total interest payable $393,482

Additional weekly payment to reduce loan by 5 years $45

Interest payable on 20 year loan $301,165

Interest saved $92,317

Example 2

Loan amount $400,000

Interest rate 7.99%

Term of loan 25 years

Weekly repayment $711

Total interest payable $524,642

Additional weekly payment to reduce loan by 5 years $60

Interest payable on 20 year loan $401,554

Interest saved $123,088

Example 3

Loan amount $500,000

Interest rate 7.99%

Term of loan 25 years

Weekly repayment $889

Total interest payable $655,803

Additional weekly payment to reduce loan by 5 years $74

Interest payable on 20 year loan $501,942

Interest saved $153,861

If you sat down a made a budget, I'm sure you could find a way to reduce your spending on certain items by $45 or $60 or $74 to ensure you reduce your loan term by 5 years and save $92,317 or $123,088 or $153,861 in interest.

Savings money each week doesn't happen by itself and until you understand exactly what you spend your money on, you won't have the opportunity to cut back. Listing all your income and expenses can actually be a scary process and something you may not entirely enjoy (it may indicate you are currently living outside your means!) but as you can see from the interest savings listed above, it is definitely worth it.

If you're struggling with budgeting and need some assistance, http://www.easy-budgeting.com has an easy to use budget planner available for downloading and provides tips, guidance on budgeting to assist with the budget process.

Remember, budgeting is the first step towards taking control of your finances.

If making a budget is new to you then you might want to consider a monthly budget planner to help ease this task. Getting your finances organized can be difficult when you stop to think about everything that is involved, but being organized is an important part of the budgeting process.

Now if you are already an organized person your monthly budget may easily be written out with a pen or pencil on a piece of paper. If you aren't that organized and this is your first attempt at making a budget then a paper and pencil is till a good idea. The whole point is to get organized and writing down all your income and expenses can help get the process started.

If paper and pencil is not your idea of fun, or your ready to get a little more sophisticated you can use pre-printed budgeting sheets. These spreadsheets are very useful because they break everything into categories for you, making it easy to just take all your income and expense information and plug it into the right slot.

You can find these printed spreadsheets in book form at your local office supply store or you can find free printable versions on the internet. The only drawback to using the pre-printed budgeting sheet is trying to shoehorn some of your expenses into categories that don't really match. You may find yourself penciling in those things that don't have a match.

Many people create their own spreadsheets on their computer. This gives you a lot of flexibility to fully customize your monthly budget. The only minus to this approach is learning how to use spreadsheet software such as Microsoft's Excel. Although if you do learn how to use this type of software you can create a very detailed budget that does everything from tracking income and expenses to keeping track of investments and retirement accounts.

The nest step up on the budget making food chain is software made specifically for that purpose. There are any number of software budgeting programs available on the market today with the two biggest being Quicken and Microsoft Money. These programs have the power to do any type of financial tracking you need to have done. They can also help you plan where you want to be in your financial future and help create a program based on your budget to get you there.

No matter which option you choose a monthly budget planner will let you take back control of your cash flow. With out it you'll be hard pressed to build a financial future for you and your family.

Creating a budget for the whole family seems so simple to say and hear. Yet if you focus your attention on working on your budget closely, you will notice the great value of setting an effective family budget that works best for all of you through good and bad times.

On the other hand, if you will not set an effective family budget, you will notice that you always seem to run out of funds each month and it seems harder to settle for any fixed amount regarding monthly expenses. Well, this is simply because of the fact that your expenses grows in direct proportion to your income. As you earn more, your mind settles for more things to buy and more money to spend since you don't set a reasonable budget that you're bound to follow strictly. So why not start creating an effective family budget that will justify your monthly financial issues and help you live an even better family all the time.

The following items show a carefully planned process in creating a great family budget.

1. Evaluate your family's current finances. Check last year's financial conditions, status and history. Look for constants and variables in the patterns of expenses, regular bills, income statements and tax returns. Prepare your way in writing a budget based on last year's financial issues.

2. Create your budget outline from existing samples in books, magazines or internet downloads or even your own style. Organize your budget creatively and systematically in this stuff.

3. Once you have gathered all the necessary information from last year's income and expenditures, start writing a family budget carefully without missing any detail from your checkbook and receipts. These sources could very well help you come up with a very detailed listing.

4. Check your lifestyle. Carefully check every area of your family's financial concerns. Assess every member of your family in terms of spending patterns. Are all these things necessary for each of them? If not, eliminate the things that are not really that important.

5. Get ready for next year's finances. Drawing from last year's financial information from your current budget plan means you are now ready for another realistic approach for next year's family budget. You may adjust or increase your income based on your salary or business status but expect certain changes each year. Take some special budget plan for usual yearly holidays as such celebrations require extra budget.

6. Be readily aware of your credit standing. Requesting for an updated credit report is one great way to effectively jumpstart your family budget.

7. Try your best to increase your savings. A bigger savings means a better chance for family prosperity and getting ready for family emergencies that might come along the way. Your ability to persuade each family member to regularly contribute in increasing your savings creates a positive outcome in your family budget each year.

Creating a sound budget for your family and sticking to it to achieve more goals in the long run yields a big difference in your family relationship and financial stability. This eventually leads to the realization of your goals and get financial freedom in return for more happiness each year.

In the cutthroat world of business, every second that is not used for operations or marketing is equivalent to millions of dollars of lost money. Companies are always looking for ways to maximize profits while cutting the cost of operating the business in half.

This is the idea behind the introduction of budgeting software. Company executives often have their own methods for overseeing the budgeting and financial aspects of the company. Making print-outs of the company's year-end budget and financial status and making forecasts for next year's budget are among these methods.

Planning and budgeting for a large company can take at least three months. Oftentimes, these budgets are inaccurate because of the need to continuously encode data coming from different heads and departments. The time spent doing this could have been used in brainstorming for new market opportunities.

Budgeting software is now a part of a company's strategy in attaining more profit for the business. The software does the company's budget, making it possible for decision-makers in the business to assess the projects they have according to profitability and feasibility within a specific time frame. Also, the software offers forecasts regarding the financial status of the business based on the budgeting and recorded data from various departments.

This software also offers other services including forecasts of expenditures that might be made by the company in the next months or years, analyses of how much the company spends for each department, the percentage of each expenditure in a company's net profit an finally, assessment of the difference between the company's budget and the actual spending that occurs. These functions now make it easier to monitor the budget and at the same time, pinpoint immediately which departments are overspending. This new way of handling finance will now enable companies to have more accurate budget information more quickly and more easily.

It is not new news that majority of people in and around America and rest of world has major issues managing their finances. Do you know: there are number of good and valuable tools that can be used to not only to manage your budget but also helps you to stick to them? Another fact that will open your eyes is about the highest credit card debt ever reported in America has touched $8500. With lots of surveys being conducted around America, figures have revealed that most people spend more than 10% of what they earn. Reason for this is the inability of an average person to manage their budget.

Do you know how important budgeting is in your life? Consider these valuable benefits: budgeting allows you to secure your finance in a proper manner securing your current and future and gives you peace of mind, not having to worry about "how to repay the money". With the inclusion of the forecasting features, the budgeting software can show you an estimate of your finances in future. If your future is important to you then you should get used to budgeting before the time passes quickly and leaving you under debt.

Almost all good budgeting software's are available on the internet which can be purchased and downloaded instantly. However, if you don't want to spend your money into any such budgeting software's then search the internet for those which are available FREE of cost. Remember, budgeting software's are not the ones like excel spreadsheets that you might be using on daily basis. Almost all the major budgeting software's have a forecasting feature which revels the figures for any "What happens if" type questions. You can create various types/styles of reports and can analyze different situations and scenarios. Using such powerful tools can give great power in the hands of the CPAs as they could understand and build an immediate breakthrough reports on the information supplied by the clients.

If you are only looking for good forecasting software which could help you predict the future, then better go for a DecisionPro Forecasting Software and Qucikbooks Pro software which gives numerous great forecasting tools to help you do a feasibility check on your budgeting estimations. This tools helps you narrow down the report you would like to analyze instantly on your computer/laptop.

Major CPA agrees on the fact that developing a forecast or budget is very complex and time consuming job. There are new and improved technology based tools that can be used to make this process a real simple with the inclusion of traditional budgeting/forecasting concepts. You will not believe, there are still organizations around the world which are solely dependent upon Excel spreadsheets.

The best thing that has happened over years of economic change is the method of calculating the budget and forecasting. Allowing the accountants with such tools and techniques is now-a-days treated as meaningful yet demanding standards.

We hear about the problems of U.S. government debt and deficits all the time. In an election year, politicians make claims about how they will work to solve these problems while keeping benefits in place and leaving taxes low. In reality, solving the budget deficit will require painful tradeoffs that are politically unpopular. Let's roll up our sleeves, crunch some numbers and identify the major tradeoffs.

To get a better sense of how current budget problems are working against each other, let's take a look at the U.S. government's income statement. The government's revenues come primarily from taxes and social insurance and retirement receipts, while its expenses are made up of the government's entire budget.

According to the Office of Management and Budget's (OMB) historical tables for the Budget of the U.S. Government for fiscal year 2011, here are the estimated figures for what the government's income statement would look like for 2010:

Revenues

Individual Income Taxes - $936 billion

Corporation Income Taxes - $157 billion

Social Insurance & Retirement Receipts - $876 billion

Excise Taxes - $73 billion Other - $124 billion

Total Revenues - $2.165 trillion

Expenses

Health & Medicare - $829 billion

Social Security - $721 billion

Defense - $719 billion

Income Security - $686 billion

All Other Expenses - $577 billion

Interest Expense - $188 billion

Total Expenses - $3.720 trillion

Net Income (Deficit) - ($1.556 trillion)

Before we discuss what each of these line items means, we should put the magnitude of these numbers in perspective. According to the Bureau of Economic Analysis - part of the U.S. Department of Commerce - U.S. gross domestic product (GDP) for 2010 is expected to be around $14.5 trillion. This means that the U.S. government budget, at $3.7 trillion, makes up just over 25% of the U.S. economy.

The Bottom Line

So let's cut right to the chase. The bottom line is that under current OMB projections, the deficit for fiscal year 2010 will come to about $1.6 trillion. That means the government will have to borrow $1.6 trillion to cover expenses because it does not have enough revenues.

Currently, the total U.S. debt stands at around $11.9 trillion ($4.3 trillion held by federal government accounts and $7.5 trillion held by the public). This means that the 2010 deficit will cause the national debt to grow by 13% in a single year.

We won't get into which administrations had the largest deficits, however, the OMB's historical tables for the budget have information on the budget, the deficit and national debt going back for decades for those who want to trace the current problem. The point here is that the deficit is unsustainable, and even if a large deficit is unavoidable during the current recession, significant measures will have to be taken soon to tackle this problem.

Government Revenues

Jumping back up to the top of the government's income statement, we have revenues. The government's revenues are composed of individual and corporate income taxes, social insurance and retirement receipts (Social Security and Medicare premiums), excise taxes and other receipts.

For fiscal year 2010, all these revenues are projected to amount to $2.2 trillion. This represents approximately 15% of GDP. In other words, if we were to tax the economy as a whole to fund all the government's revenues for 2010, the effective tax rate would be 15%. The problem here is that these revenues are simply not enough to cover current expenses.

Let's pretend, for a moment, that all of the government's current expenses are absolutely necessary and that the deficit must be overcome by increasing revenues. There are essentially two ways this can be achieved: The economy can grow, increasing tax revenues or the tax rate can be increased to generate more revenues.

Increasing the tax rate is politically unpopular - especially if you had to increase it by 66% (10 percentage points), which is what it would take to balance the budget. But the economy would have to grow by 66% in order balance the budget while keeping tax rates where they are.

It is clear that growing our way out of the deficit is simply not possible in the short run, and in the long run, it is likely that expenses will continue to grow making it difficult to ever catch up. A 25% tax rate on the economy as a whole would balance the budget, but such a tax increase may wind up slowing down the economy and reducing revenues the following year.

Cutting into the Budget

Raising government revenues alone cannot solve the deficit, so let's take a look at expenses. Health and Medicare are the biggest ticket items, racking up $829 billion - 5.7% of GDP. $462 billion of that is Medicare alone.

Next comes Social Security, which amounts to $721 billion - about 5% of GDP. Adding these first two expense items together comes to about $1.5 trillion or roughly the same size as the current deficit. But before we get excited about eliminating these programs to balance the budget, we have to remember that most of the $876 billion in social insurance and retirement receipt revenues are tied to these programs. Cutting them would mean losing the revenues from them as well.

Defense spending is the next big-ticket item on the list, weighing in at $719 billion, roughly the same amount as social security. If we cut all three of these programs entirely - health, social security and defense - that would about balance the budget. Of course GDP would also fall by 15% because that's what these programs amount to. Jobs would be destroyed and tax revenues would fall resulting in another deficit.

Let's focus on this for a second. Completely eliminating the three largest spending areas of government - over 60% of the total budget - would still not quite guarantee a balanced budget. There are no painless solutions to the deficit. Defense, social security and Medicare are all programs that many Americans care deeply about, and significant cuts to any of them would hurt.

Moving down the expense list, Income Security amounts to nearly $686 billion. Income Security is composed of federal employee pensions, housing assistance, food stamps, unemployment insurance and other programs designed to provide a safety net for Americans during economic downturns. This line item is clearly going to be high during a recession and politically difficult to cut during hard times.

The next category we have on the government's income statement is All Other Expenses. That's right: Anything else we haven't covered falls into this $576 billion bucket. All these programs are barely over one-third the size of the deficit. When politicians want to sound tough on government spending, they pick some unpopular program from this bucket and attack it.

There may certainly be a lot of programs in this catch-all category that could be trimmed, but cut them all and you've only made a dent in the deficit. Here are just a few of the programs we'd lose if we wiped out this area: veterans' benefits, transportation, education, international affairs, justice department, energy, science, agriculture, community and economic development, etc.

Finally we come to our last expense item - and perhaps the scariest. Interest expense on the national debt will amount to $187 billion. It may sound like a lot of money, but it's actually a deal right now. Since our total debt is roughly $11.9 trillion, that would mean that our weighted average interest rate on that debt is around 1.6%.

As recently as 2006, that weighted average rate was around 2.7%. With today's level of debt that would put interest expense at $317 billion. And every year we have a deficit, that debt continues to grow. With the growth in debt comes increased risk and increased rates on that debt. Interest expense can quickly get out of hand, and the only way to control it is to balance the budget and pay down the debt.

What to Cut?

No matter how you slice it, Americans will have to pay their debts - either through higher taxes or lost government services and benefits (or both). Yet, we still haven't heard any politicians stand up and say they'll take the heat for giving the country its medicine.

And this analysis of the deficit problem is in many ways overly simplistic, because it only looks at the current snapshot of the problem. In reality, the issues are even more complex given the fact that many government expenses will continue to rise (Medicare and Social Security obligations), and the source of revenues will fluctuate with the state of the economy. But this makes it all the more imperative that politicians tackle this problem now, and that Americans make the hard sacrifices necessary to avoid bankrupting the country.

Where does the money go? How can you plan your own financial future? What is your current financial status? Answering those questions can help you put your financial life under your control, but it will take time and patience. It all starts with understanding your fate is up to you.

A good budget is goal oriented. A budget is a specific action plan that gets you from where you are now, to where you want to be in the future. A budget is one of many personal finance tools to help you reach your personal financial goals. It is only as complicated or time-consuming as you need it to be.

No matter how much your income is and expenses are, the same equation applies to everyone. All of us keep what is left over after subtracting expenses from income.

If you keep adding to a goal, you will eventually reach that goal. Sometimes life events will interfere and you will have a discrepancy. That is called a budget variance. That is ok. Simply use the facts at hand to make the best plan you can create with the resources you have available going forward.

Most budgets will have variances over time. It is useful to keep track of budget variances. If your monthly variances are consistently one-sided, there is something wrong with the budget. If that happens, simply make some changes either to your income, spending, or the plan itself. On the other hand, if your variances average out, then your budget is a good solid plan.

All budgets are plans but there are probably as many variations as there are people creating budgets.

In its classic form you could start with your income on the top line, then list and subtract expenses that are actual needs, which are must have items. Following those lines, list and subtract monthly targets to accomplish any mandatory goals. At that point, you have what is called discretionary income remaining; this is where you subtract any secondary goals, and any wants, which are nice to have items.

A more primitive, but still effective, budget is simply to label and put cash in the envelopes. When the cash is gone, you do without, while any left overs go to savings and investment accounts. This is effective for not over spending. It requires no paperwork, but money in envelopes can be stolen, lost, or consumed in a fire. It also tends to put saving and investing last.

The most goal oriented budget is what I call the self-activating budget. Goals are set in advance in a budget. But, this budget takes no chances. Goals are set and then arrangements are made to sock money away automatically towards the goals first. It could be automatic check deductions or automatic bank transfers from checking to savings. You live on what is left. You don't need monthly accounting for expenses because you know your goals are already satisfied. If income or expenses make a long-term change, a new plan is required, otherwise there is no need to review the plan since all that can be done is already being done. Obviously, there will be variances, all budgets have them. But, the intent is to account for variances by doing everything possible to make do with what is left over, while only resorting to altering goals as a last resort.

It is important to be honest with yourself for any budget. Cheating only undermines your own performance. Once an accurate budget is created, you'll begin to have more control over your own life. You are the only one who can decide what changes, if any, are to be made. The important thing is you'll be making conscious decisions about your life from the instant you begin to plan.

Making a budget might be a big change. If you plan, you are more likely to you can have money in the bank with some money invested to grow on your behalf. Saving, investing, and personal finance means more freedom for you, and doing a good job of a budget makes it less likely you'll ever be at the mercy of others. Isn't that worth some effort?

A budget is a proven personal finance tool; it is one of many steps in getting to a better point in financial life. It all starts with understanding your fate is up to you.

Do you have financial problems? Then a budget is the answer if you are tired of wondering where your income went. A budget is the answer, if you don't have savings. A budget is also the only solution to getting out of credit card debt.

You can purchase a 6-column ledger or use an electronic ledger in recording your expenses and income. Or purchase budget software. While an electronic ledger (like Excel) functions by keeping your financial records and doing your computations, budget software programs will do much more.

Here are several features your budget software should have, to effectively help you keep track of expenditures and record your savings.

1. The budget software should with a worksheet, show you where your funds go, and provide you with the exact amount of your current financial situation.

2. The budget software should have in addition to the more common ledger title columns, make available the option for you to create your own personalized account titles. This makes it more accurate, and enables you to keep track of daily expenses, of your saving accounts, payments for insurance, auto, utilities payments and even entertainment expenses.

3. The budget software should allow you to compare the financial differences between the budget you set against actual expenditures. It would be great if this feature were accompanied by a reminder feature that tells you, you're overspending.

4. The budget software should provide you the option of creating and tracking individual accounts, should you wish to set one for you and your spouse, or your children. You can use this to monitor each child's expenses.

5. The worksheet visuals of the budget software should be easy to understand.

6. Usage of the budget software must be user friendly and have help menus that are built in the program.

After you've read the company brochures, and spoken to the sales staff, request for a demonstration. Personally test the budget software, to make certain you have ease of use. Ask the company they provide product updates at discounted prices.

Make sure that the budget software vendor have an efficient customer support and after sales services. Request for list of their clients and talk with these people. Ask to be sure that you can reach them on the net, by phone and email. List their physical address, should you need to drive by their shop.

You need to be honest, committed and disciplined in making and keeping a budget. If you do, you'll be able to get the most out of your income in spending along with saving wisely.

Working from home and being the boss of your own home based business is a dream come true for me and a path that many others either have or would like to follow. It's a great feeling and a very rewarding experience in more ways than just financially.

However, not everything is easy and just falls into place when working your own home business. One of the aspects that I struggled with and still have to work on daily is maintaining a balanced budget. 

I always thought if I could just work within the restraints of my available money I was good to go. I soon learned (pretty much the hard way) through trial and error and success and FAILURE that creating a working budget means much more than just keeping track of your money.

I found that there are actually 3 things you need to keep track of during your day to day work schedule. Money, Effort and Time are all very important commodities you have at your disposal each and every day. Each one plays an important role and neglecting any one or all of them is quite often the difference between having a successful business, just surviving (you know the feeling, hanging on by a thread) and that dreaded word - failure.

I wrote this article to try and help others avoid some of the mistakes I have made. To me one of the great parts of working in Network Marketing and really any home business is the amount of sharing and help available from the people who truly follow this business plan. 

So read on and learn there is a lot more than just watching your money when budgeting for your network marketing business. To be successful in MLM, or really any home business, you need to not only budget your money but also your effort and your time. Tracking how you do things and the results you achieve can help you to improve your management of all three aspects (money, effort and time) until you find the formula that works for you and your business. Teach yourself to breed success and avoid the waste that so many who start a home business get caught up in.

Budget planning is not usually a topic that comes up when you are starting your network marketing business. Business planning altogether is not at the top of the list when you are being recruited or you 'discover' your network marketing company that will make you your millions. But once the dust settles and the initial 'fire' burns out, are you ready to do whatever it takes to become successful?

Budgeting your money, working to your maximum effort and effective time management are all skills that are needed to be a success but are not skills we are born with. Procrastination and the lack of a boss and a deadline are real killers when you become your own boss. 

Have you ever found yourself checking your email even though you just checked it 10 minutes before? Or maybe you are reading about the next great plan that will take your network marketing business to the next level. I mean who doesn't want to double or triple their income just by writing a better title to their email. But honestly if you just started out and you don't have a list to send that email to then how are you going to double your money? These programs I am sure work fine, but take a look at where you are and what you have. Where can you really spend your time effort and money more effectively in order to build your business?

I know you probably do these things because I have (and to be honest) and I still do unless I stay focused. To help myself I created a little acronym - M.E.T.  It stands for Money, Effort and Time. I ask myself, "Have your MET your needs and your budget TODAY?" before I stray down the path of easy dreams.

Let's look at all three parts more closely. M or Money is the part that everyone thinks about when you say balancing a budget or budget basics. It really is important, but it can actually be the simplest of the three to manage. First, you need to decide how much you really have to spend on your business each month. Maybe its $100 or maybe $200; It's different for everyone and its OK if it can only be $20. Once you determine this you must decide what is important to your business RIGHT NOW! If you just started maybe you need business cards or you need a few office supplies. If you have been working awhile maybe you want to invest in an email autorespond system or purchase some leads or buy some promotional material. It all depends on your goals and where your business is along the path. But once you set your budget for money stick to it. Decide what is really needed for where you are. You don't have to purchase every great sounding product or have all the bells and whistles. Get yourself established and then use some of that new income to help you get more and more of your needs.

Next we have E of Effort. Really it is even better to call it Effective Effort. Many of us spend lots of time in front of the computer or staring at the phone and say we are at work. But how much effort is really being put in and is it at all effective. Maybe you have two hours to work today. One about 7 pm right after dinner and another around 10 pm after the kids are in bed. Well if we decide to spend 30 minutes reading a training manual and then 15 minutes responding to email and 15 minutes working on writing an article we have put in some great effort. These are all things that Network Marketers need to do. But if we did all this at 7 and then we saw we needed to call a new prospect or call one of our new team members and we are sitting down at 10 pm to do this we have wasted our time. It's too late to make our phone calls. So even though we were very good at making our list and getting our work done we didn't do it in an effective way so we wasted some of our time.   And I haven't even mentioned that most people (me being very guilty) get sidetracked by the cool YouTube Video or the interesting email or the great salespitch. Focus is critical to Effort and making your efforts effective.

This takes us to T for Time. I have saved this for last because that is where it fit the acronym, but even more importantly because it is what I consider to be your most important commodity. Money we can work around and even earn more. Effort can be relearned or refocused and therefore improved upon, but TIME is a here just once. The hour I wasted or didn't take advantage of today can't be replaced. It is GONE. Time is precious and critical to everything you do and want to do. So take a hard look at your time and how you want to spend it and how you actually spend it. You can't earn it back. I started this home business as a way to spend more time with my family and doing the things I love so for me budgeting out this block of time came first. I also (like most Network Marketers) started my home business while still working my 9 to 5 job. So once I took out these blocks of time I could make a realistic budget of how much time I could spend on my Home Business. Again, this is different for everyone. So don't go by what someone else did, do what's right for you. 

Next, look back at all 3 areas and BE REALISTIC. Are you really going to work the business at 9 on Saturday night? Do you really have an extra $250 dollars EVERY month? Will you be able to focus and put in 100% effort at 5 o'clock when the kids are hungry and dinner needs made? 

To get a true evaluation of what you have to spend with money and time and how much effort you can really put out, start tracking what you do. Look around at successful businesses. You can bet they track things. Do you think they spend a million dollars on a Superbowl commercial and then not track to see if they are making a profit? What is the Return on Investment (ROI)? You can do the same. Create a tracking sheet to keep track of when you work on your business or when you have down time you could. Keep track of where your money goes and if you have any extra to invest in your success. Keep track of what you get done in the time you do spend working. 

Tracking not only will help you make a realistic balanced budget but will help you to focus and use the resources you have more effectively. Effective effort rears its head once again. See how it all keeps tying itself together in a big circle. 

Time to get started. Don't waste anymore of your money, effort or time. Work on setting your goals and then using your budget balancing basics to create a balanced budget. Stay focused and realize success does not come overnight but it does come in little packages if you just have fun and enjoy what you are doing. That's the whole reason we want this home business in the first place - Remember?

Success in this business is not defined by speed. It is OK to take a little longer than the guy you read about online. In all honesty it takes 2 to 5 years for most Network Marketers to reach what they consider a successful level of business. Of course the more you have MET your budget and the bigger the budget is can speed things up. More Money, more Effective Effort and of course more Time can all get you to your goal quicker. But before you give up, look at where you are now. Are you happy with what you have or where you are headed? Are you willing to spend the extra Money, Effort and Time required to achieve the life you dream about, the life you deserve. 

Have you MET your goals? Avoid waste and start breeding success. Budget planning for your Money, Effort and Time is the best way to create success. Stay focused and remember to keep all 3 aspects in mind during your daily routine. 

Think about it! 

Let me ask you a few questions.

Do you usually run out of money by the end of the month? Are you living paycheck to paycheck even though you make decent money? Do you have a budget or are you flying by the seat of your pants?

If you answered yes to one or more of the questions above, chances are good that you don't have a personal household budget. It's a sad fact that most people don't have a monthly budget because they thing that budgeting money is too stressful.

What are your feelings when I tell you that you need to create a personal budget because budgeting money is the only way to gain financial freedom?

- Stress
- Anxiety
- Fear
- Anger
- Deprived

Most people feel all of the above at the just the thought of creating a budget plan. The whole process of budgeting money is a complete mystery to a lot of people. Feelings of stress, anxiety, fear, anger and deprivation all set in when you think about sitting down and planning a personal home budget.

But budgeting money doesn't have to be any of these things. Your money is out of control without a budget and you have no idea where most of it is being spent. With a personal budget plan, you will actually have more money to do the things you want to do because you sit down ahead of time and PLAN where you want to spend it.

Planning a personal budget doesn't have to be difficult, especially if you break it down into smaller steps. The process as a whole can be very overwhelming and many people wonder how they can ever stick to a budget. So let's talk about some budgeting tips to make the process easier.

1. You need to know what you have been spending in order to get a plan to control where you spend your money in the future. Most people don't keep all of their receipts so it can be difficult to go back and try to track where you money has been.

2. For the next month, you need to keep every receipt so that you can track every penny you spend. Have a special folder or large envelop that you stick every receipt in as soon as you walk in the door.

3 After you have kept your receipts for a month, you can sit down and categorize your money. Certain things like your mortgage or car payments will be the same every month so those things will be easy. Track expenses in categories like:

- Mortgage/Rent
- Utilities
- Gas
- Insurance
- Groceries
- Entertainment

There are many other categories of course but these are some of the basic things that you will need to track. Figuring out exactly where you are spending your money every month is the key to setting up a budget.

4. The next step is to take your monthly income and subtract all of your monthly expenses. The number you get is either the amount you have left over every month or how much you are overspending every month. If you have extra money every month, then you can come up with a plan on how to save more money. But, spending more than you make every month is a huge problem and steps must be taken to reduce your spending and bring in more money.

5. The next step is to set up a budget and stick to it which is easier said than done. It helps if you set up short term goals and long term goals that you can look at every day. Knowing you have goals that you are saving for makes it easier to not spend your money on a whim.

6. Stop impulsive spending. This can be very hard to do especially since your spending habits are so ingrained.

Budgeting money makes most people shudder with dread because they think it will limit some of the pleasures in their lives. But the opposite is actually true. By controlling your money, you can spend your money on those things that bring you the most money instead of just frittering your money away every month.

Once you know how to initially set up a family budget, figuring out what kind of budget you need is the next step. A common mistake is thinking there is only one kind, but in reality there are budgets that can help your monthly family spending, help create financial safety or help you and your family achieve your financial goals.

As I'm sure you've already read our article on how to set up a family budget, the next step is here- figuring out if you need a comprehensive, problem solving or planning budget.

1. Comprehensive Budget (used for general family budgeting)

i. This family budget can also be referred to as a Master Budget. This budget is for families on a limited income who is trying to limit spending. This budget would include making lists of your spending, with categories and exact numbers broken down by month. This comes in most handy when you need to cut down your family expenses because you have all your information in an organized list in front of you.

ii. This budget can also be used to review your spending over a long period of time, which is referred to as an overall budget.

2. Problem Solving Budget (used for creating financial safety for a family on a budget)

i. This type of family budgeting tool works off the comprehensive budget when you notice you are having problems keeping your spending down in a particular area. You create a more detailed list of the area so as to see exactly where your money is going and what areas you can afford to stop spending on.

ii. This budget is known for finding problem spending areas in a family budget and fixing them.

3. Planning Budget (used for achieving your family's financial goals)

i. This budget works hand in hand with your family investments. If you are planning your budget specifically around an event or time in your life, this budget can help. It adds an extra category to your initial family budget for your goal.

ii. First, you pay for all other necessary expenses (rent, bills, groceries, etc.). With the leftover money, decide on an amount to set aside in this column for your investment. This is a category that does not show money spent, but money saved.

iii. This plan can be used for family savings as well as investments. This column does not need to be geared toward a specific goal; instead, it can be family savings or money for emergencies. Either way, it is an important category for both family budgeting and investing.

THE NEED FOR A GOOD BUDGET

One of the major causes of divorce is bad money habits. Finances are a difficult thing for many people to manage properly. Mismanagement has caused communication difficulties, tension, frustration, anger, resentment, and suspicion. Money has ruined friendships and debt has slain dreams and mired people in desperation.

For most of these people a simple understanding of the basics of budgeting would have saved them much anguish and grief. This article is meant to help you understand the practical theory behind having a good budget.

Most digital budget programs on the market today are actually nothing more than glorified check registers. They don't actually focus on the budgeting aspect properly.

To have a good budget you need these things:

1. The ability to pay for all your expenses with what you make. In other words, your expenses cannot exceed your income.
2. The character to let the budget be your boss. You must obey the budget!
3. Knowledge of the monthly average of every bill and every expense within a normal calendar year.
4. Common sense in regards to money.
5. And a strong desire to get your finances on the right track.

THE THEORY

This is not by any means the only way to do a budget. It is however, the simplest and, in my opinion, the most effective. Here is the basic theory of budgeting.

Imagine having a separate bank account for every bill you had. And for the sake of argument, let's say you get paid weekly at $400.00 a week. Each time you get paid, you would deposit a portion of that paycheck throughout ALL your bank accounts. You would put, perhaps, a $100.00 in rent, $100.00 in Groceries, $50.00 in gasoline, $25.00 in natural gas, $25.00 in electricity, $40.00 in tithe, and $60.00 in phone and internet bills.

Your entire weekly check is now distributed throughout the accounts. This assumes that you are getting paid weekly. If you get paid every other week, twice a month, or even monthly, you'll need to taylor this to fit. The concepts are the same.

Your budget needs to be set up on a 4 week month. Only three months out of the year will there actually be an extra paycheck (only for those paid weekly or every other week). The budget works best when you base it off of 4 weeks.

The theory is that you set aside a portion of your paycheck for each account or expense. When the bill comes due, the money has grown to pay off the expense. It'll be there when you need it. You won't have to scrounge around, try to stall until the next paycheck, beg, borrow, or steal. You always have the money set aside for the expense.

When Rent reaches $400, in the above example, you would then pay the landlord $400 and subtract that amount from your rent account. Some accounts, like groceries, are debited every week and often more than once a week. But it doesn't matter. You credit each account or expense with money every time you are paid.

When you go to buy groceries you simply look at your grocery account and see how much you can spend. In the above example there is $102. The $2 is left over from the previous week that was never spent. You can spend some or all of that $102 on groceries. What you don't spend this week, you simply allow it to roll over into the next week. As long as you don't spend more than $102 you won't be taking money that is set aside for rent or electricity!

Doing your budget this way tells you how much money you can spend in that category or expense. This keeps you from overspending and from taking money that needs to be set aside for another use in the future.

Step 1 - List every expense and debt you have.

Step 2 - Break them into categories, like Home and Household, Utilities, Vehicle, and so on.

Step 3 - Determine how much money you need for that expense on a monthly, 4 week, average. Some expenses, like natural gas, vary depending on the season. Take the average of an entire year and use that amount for your monthly budget.

Step 4 - Determine how much of your weekly paycheck needs to go into each account so that by the time the bill is due, you can pay it off (usually 1/4 of the amount due).

Step 5 - Every time you get paid, take 1/4 of the monthly amount needed and add it to each account.

Step 6 - Never spend more than is actually in the account. Always look at your budget to know how much you can spend in each area.

Step 7 - Subtract any payments or receipts from the appropriate categories.

Step 8 - Repeat steps 5-7.

A budget isn't a complex thing, but it does take discipline. You must let that budget become your boss. You must let it tell you if you can or cannot spend a certain amount of money.

You see, you don't actually open up a separate checking account for each bill. Instead you keep track of it either on paper or digitally. When you add up all the money in all of your accounts the total should equal what you have in your checking account.

There are 4 ways you can keep track of your budget accounts.

1. In envelopes. Use 1 envelope for every expense or account. Each week cash your check and divide the money up into your various envelopes. When you need money for, say gasoline, you open that envelope and see how much you can spend.

2. On paper, like a spreadsheet. You designate a page for each account, bill, or expense. You then draw columns. Start with how much you have in that account and add or subtract as necessary. Your money stays in the bank this way, but you are able to clearly see how much you can spend in each account.

3. On a computer via a spreadsheet. You follow a similar method as number 2. But here, you can use calculations of the spreadsheet to do the adding and subtracting for you.

4. Use a good budget program for your computer. A good budget program automates most of this process explained above.

An under-used tool in QuickBooks is the Budget and this is a good time of year to set it up. I know many businesses don't even take the time to work on a budget. But your budget is a powerful feature that can help you in a few ways. First it helps you control your costs. I realize some costs are hard to estimate especially as we see gas prices going up. But it still helps give you some guidelines in operating your business. You can also use it as an incentive when you're looking at certain goals that you'd like to achieve in your business. A phrase I like is you can't hit a target you can't see. So having a budget helps you view those goals... It can also be a jumping-off point for discussions about long-term planning.

I'll go through the steps today for setting up a budget for your company based on income, cost of goods and your expenses. But for those of you who use Classes in your QuickBooks, you may also want to do a budget for each Class.

To get started, click on the Company menu. Select Planning & Budgeting, and then Set Up Budgets. If you've already set up a budget, that one will appear. You'll be able to edit it or create a new one.

Select Profit and Loss to include all of the previous year's activity and click Next.

On the next screen, you'll also be able to include the criteria, (Customer: Job or Class),so you can budget for individual customers/jobs or classes instead of by account only. Leave this box unchecked for now. Click Next.

Determining the Content

Next, you'll indicate whether you want to start from scratch with your own figures or let QuickBooks pre-populate your budget with last year's numbers. Sometimes I let QuickBooks populate just to get an idea, but you don't have to keep it. But I know many businesses prefer to simply starting from scratch which is what we'll do for this example. Select Create budget from scratch. Click Finish.

Click on Rent Expense and enter 3,500 in the January column. Hit Tab. You'll notice that the Annual Total column changes to reflect that entry. If you expect that your number will fluctuate over the year, continue to enter those figures in the month columns. If it will remain the same, click Copy Across in the lower left corner. Every column (except for Annual Total) now displays 3,500. (If you would prefer to enter in an annual total and have QuickBooks spread the amounts across the months, click on Help> Send Feedback and let Intuit know. It's definitely on my wish list.)

When you're satisfied with your budget, click Save. You can easily access and edit it anytime from the Company menu.

More Budgeting Tools

QuickBooks' budget flexibility doesn't end there. Let's say that your major office supply vendor has just lowered its bulk prices by 5%, halfway through the year. It's easy to make this change to your existing budget. Click the Office Supplies row, and then click on Adjust Row Amounts at the bottom of the screen.

At the top of the window, you can choose to have the change begin at the first month of your budget or at the currently selected month. Check one of the two buttons below that to indicate whether you want an increase or decrease, and then enter the numerical value in the box.

Tip: Want to start over? Click on the Clear button in the lower right corner. This deletes all of the data in the current page of the budget.

To switch back and forth among budgets, click the arrow under Budget in the upper left corner of the window. A list of your budgets drops down. To build a new one, click on the Create New Budget button in the upper right corner.

Seeing the Fruits of Your Labor

Keep in mind that you can only create one budget per fiscal year for each account, customer or job, and class combination. This still gives you a lot of budgeting power.

Of course, the real power of QuickBooks budgets lies in its budget reports. Using these, you can get an instant, insightful look at how your income and expenses are performing. Go to Reports | Budgets and Forecasts to find them. They include Budget Overview, Budget vs. Actual, and Profit & Loss Budget Performance.

If you need help working with the budget features in QuickBooks, let us know - we'll be happy to assist.

It is amazing how many people are barely making ends meet. It is even more amazing how many people are taking their finances for granted by failing to plan and budget. People assume that planning and budgeting is for the other guy, or some large corporation.

I personally believe that it is a shame that our society has not focused on teaching these basic, and yes I say basic, life skills. Planning and budgeting focus on creating short and long-term life goals, and creating controls and measures by which we can discipline ourselves to meet and achieve those objectives. Some people cringe when they hear "controls and measures", but we must remember that knowledge is power. Controls and measures provide you with the knowledge to know when adjustments must be made to keep the course. You must not be afraid of what a budget plan will disclose, instead use that information and everything at your disposal to change a potentially bad situation into something positive. The idea is to not bury your head in the sand, but with open eyes plot an expected end.

Everyone should have goals and a vision for their lives. It is not enough to just want something; you must consider and learn what it takes to get that thing you desire. A critical and base part of knowing how to get something, is knowing what you currently have. When you think of navigation, whether it is for boating or airplanes, they both must know the starting and ending points before they can plot the best track to the destination; you must also have a realistic understanding of your starting point. Your financial starting point comprises, but is not limited to your current cash flow, and other resources at your disposal.

In order to reach and achieve your goals and thusly realize your vision, you must plot a course and direction that will guide you to the destination (goal). Budgets provide the financial roadmap (navigational plan) to achieving your goals. At its best the budget should be living, and adjustable, consistently providing a view to the prize (the goal). When I say adjustable, I mean it must provide the visibility to be able to change upcoming discretionary debt sources to accommodate current day unexpected expenditures; these changes will in effect balance the budget. With regards to view, your ability to follow-through with the budget will greatly depend on your ability to keep the goal in sight.

To be successful you must plan and budget. Every small, medium, and large business including corporations plans and uses budgets. Budgets provide the roadmap for their fiscal success by ensuring that the money is applied to items that will help the company meet its goals. We than as everyday people should do no less, and use budgets as a means of achieving our goals.

Given the times in which we live, budgets are more of a requirement than an option. Look for a budgeting program that provides visibility, changeability, and maintainability. Visibility is the ability to consistently see the goal; your vision and goals will provide the continued motivation to follow-though with the plan. Changeability is the ease at which you can make changes that are rolled out through the entire budget. The ability to be able to easily create, edit, and delete income and debt sources will determine the ease at which you will be able to tailor a budget the meets your requirements. And lastly, the budget must be maintainable, it must be living and not rigid; you will need the ability to see where a current expenditure has caused the budget to go negative in the future, so you can adjust an upcoming discretionary expenditure to balance the budget.

To function as a family today, and not have some form of a budget, is not a good idea, given the current volatile economic climate. Preparing a budget, in our opinion, is a must - not only does good home budgeting software help you to track your income and expenses, it will also aid you in planning for expenses that are most certain to occur down the road. Some of these items are semi annual or annual insurance premiums, parent and/or children dental bills, etc. And we all are well aware of auto repairs that seem to come at the wrong time.

Yet, in spite of considerable tangible short and long term advantages, many families and working professionals shirk from setting up a workable budget. Many financial and credit professionals state procrastination as one of the primary reasons, and we add another reason in that many fail to see the necessity, until some unforeseen tragedy occurs, such as loss of a job with a drastic reduction in income. Granted, having a budget isn't going to solve the job loss, but if a budget had been in place, spending would have been under control and some debt reduced. Lenders, upon seeing a workable budget in place, are more inclined to work with the family, and make changes and loan modifications to keep them going until the situation improves.

Whatever the reasons though, the right home budgeting software program remains vital for the fiscal solvency of earning families and professionals in today's still volatile economy. This can be an easy and convenient solution for those willing to take the time to get a working budget in place.

However, one only has to do a search on the internet for budgeting software, and they will be inundated with software programs that claim to have the answer. There are several that are detailed enough that will do the job, and some that are really "overkill", so what package does the average family need? We have tried many of these programs, some downloaded and some that were online, and have come to the conclusion that home budgeting software programs that are based on the "zero-sum" method work the best. Our website explains this in detail and we do recommend that type of software.

Quite simply, good home budgeting software is one that not only tracks your income and expenditures, but also provides an analysis with strategies on optimizing for maximum possible returns. In our opinion, all of these programs should emphasize reduction of debt, which in most families, does create marital problems. We can't stress this enough "prepare a budget - control your spending - reduce your debt!" I often "step on toes" when I say that everyone should have a budget and live within their means. This should start with children being trained with this concept, and perhaps the next generation won't be paying our bills.

To summarize all of this, good home budgeting software should incorporate features which take care of not just your present but also helps to plan your financial future. We encourage you to take the free trial of this very affordable software recommended on our website, and see if it will handle your personal or family needs. Also, log into the forums and see what other users are saying. We think that after trying it and seeing how easy it is, you will begin to use this home budgeting software in earnest.