Budgeting

Setting up a budget is a necessary and important tactic to use to ensure that you are living within your means and are on the right track. Budgets can help you to achieve a financial goal that is far off in the future. Setting up budgets with and for your children is a very good idea for it can instill good financial practices at an early age. Setting up budgets for your younger children can help them to save up for something special. They can earn money around the house and then determine how much of that should go to their savings and how much they want to use for daily use. This will allow your children to see what it is really like to save up for something that they really want. They will be able to weigh what is more important to them in terms of financial means and see what it means to sacrifice in the short term to gain more in the long term. Using budgets to save that extra cash allows your children to be able to see where their savings are going.

A family budget can allow your family to save up for a common goal. Whether it is a vacation or a new pool, a following a budget is a great way for the entire family to come together a put their efforts into a common goal. Family unity is important when determining where the extra cash flow should go. Preparing budgets can also allow you to be prepared for emergencies and other unfortunate occasions. It is important to know that in a case of emergency your family will be covered. Having this peace of mind will allow you and your family to be comfortable enough to know that in something unexpected happens you will have enough funds to cover the costs.

Setting budgets for retirement is a very important thing to plan for. Once you have actually retired, budgeting is going to basically be your way of life. For you have planned for this time in your life where you no longer have to work, but you must make sure that you spend your retirement wisely. If you set up your budgets wisely and responsibly you should have more than enough money to live off for the rest of your life. Retirement is a great stage in your life that could be filled with joyous occasions if you plan for them correctly. It is important to realize this when putting money away for retirement so that you budget correctly.

Overall budgets are apparent at every stage in life that helps to you to realize your financial goals. Budgets help you to decide how much of your resources should be allocated where. It is important to budget your money so that you can keep your finances on track and be able to save up for something important like retirement. Keeping your finances in order allows you to live a better life free of financial worry.

A healthy home budget is the key to wealth, success and even a healthy family life. American and Canadian Families could create a much healthier home budget with a bit of discipline and planning. Ask a Consumer and she may tell you, up front, that paying the Grocery Bills gives the greatest cause for concern in the family's home budget. Too often, money creates family fights. Paying bills, the Home Budget and family finances too often cause divorce. Parents can avoid such calamities with financial discipline, greater research and some professional help. Unfortunately, areas for greatest financial relief too often lie off limits, outside of the usual scrutiny for possible savings in the family's home budget.

These three areas: Mortgage Payments, Taxation of Income and Credit Card Debts drain away the family's fortunes in ways we least suspect. In trying to reduce expenses from the Home Budget, you can dismiss high gas prices as a temporary event. Fluctuations in fruit and vegetable prices due to vagaries of the weather can impact the monthly home budget too. Those numbers pale in comparison to the heavy hitters in a home budget, such as Income Taxes paid, Mortgage Interest and excessive and un-necessary loan or Credit Card Payments.

An annual, Income Tax Refund Check can offer relief in many a Family Budget. In order for your family to benefit, you must arrange your finances to profit from all income tax deductions you might be entitled to. You may hear about certain deductions. But since you, like many an employed Consumer, are no Finance Wiz, you tend to ignore them to your peril. Unfortunately, as an Employee, your income tax deductions are limited. They are almost cast in stone by government legislation. As a Business Owner, however, the rules are much more generous. You could save huge sums in income tax payments because of business expenses. Fortunately the distinctions and the rules are not quite as rigid as you might think. Let's leave out the obvious personal deductions, medical, and educational expenses and similar employee and work related expenses. Here are some additional income tax deductions you can snag if only you had the know-how. These tax deductions, when astutely applied, would add considerable income to your home budget:

1. You can create a Home Based Business and immediately qualify for related expenses as income tax deductions

2. You could increase your Savings for Retirement and for your Pension to create additional income tax deductions

3. You could use Other Peoples Money for Investments. Here again is a third very legit means for tax deductions most Consumers are not familiar with.

These are three key areas around which you could build substantial tax deductible expenses and hence keep a much larger portion of your income. They could add to the Income portion of your Household Budget and significantly reduce expenses.

On the expense side of the Home Budgets, American and Canadian Families pay way too much in housing costs. A recent study of home finance revealed that the cost of housing approaches closer to 50% of the household budget than the 30% and 40% debt service ratios, which bankers use in screening applicants for mortgage financing. Rising House Prices and lower interest charges have allowed many to occupy homes they may soon be unable to afford. Tenants have used rent money to purchase homes. As interest rates continue the recent upward trend, foreclosures will increase and Canadian and American Households as Tenants or Home Owners will be priced out of their regular home expense budget.

Newer approaches to mortgage payments have uncovered huge sums of excess profits that Lenders have been enjoying for years at the expense of the average Home Owner. These studies found that over the life of a mortgage, Consumers typically hand over DOUBLE the Purchase Price of their Homes as extended and un-necessary mortgage payments. At a time of record low interest rates, these large sums represent a voluntary contribution to the Lenders' Profit margins. In the event you are hearing of these developments for the first time, then this over payment of a mortgage applies to you too. Almost every mortgage holder pays too much! Consumers as a group have been cajoled into giving our infinite trust to the Loan or Bank Officers. What we failed to realize is that in the lending industry, no one represents the interests of the Consumer. You must seek out your own professional for help.

The final item of Credit Card Debt relates to impulse buying of clothes, shoes, trinkets, entertainment and vacations, CD's, snacks, lattes and other consumables. Such expenses dramatically increase the monthly household expenses. As a Parent or Single Mom, responsible for the Home Budget, you would be shocked to review actual expenses from impulse and non-essential purchases. One Bank engages a prominent Financial Planner, who advises Customers to refrain from needless expenses on items such as cigarettes, lattés, candies, coffee, and gum. These savings, they claim, could help to create a tidy retirement fund.

With a bit of discipline, Consumers could reduce expenses by huge amounts in differing ways: 1. At $10.00 a purchase, you could drive a Mercedes Benz by giving up 6000 Trips to the Dollar Store. 2. At $40.00 a pack for cigarettes, a Consumer could have the entire gas bills paid if he simply quit smoking 3. A $250.00 a month Retirement Savings Contribution could result from ignoring the daily craving for an expensive latté or the three cups of coffee a day habit.

These expenses, when paid by cash, reflect an unnecessary drain on the household budget. Because of service charges, the drain is even more severe when you use Credit Cards and even Debit Cards for small and impulse purchases. All of a sudden, that Latté which costs you $3.50 is in fact $4.50 if the Credit or Debit Card Company charges a $1.00 fee for each transaction. After one month, that two Lattes-a-day habit becomes a $140.0 a month cost. With maximum financed credit or debit charges they become a $200.00 to $250.00 a month expense.

Consumers can generate huge savings to the Family's Home Budget from a bit of research and from prudence and discipline in household expenses. It is vital for you to understand mortgages, loans and credit expenses much better. With a little tax planning, some stinginess and some savvy, Consumers can improve the household budget in ways they least expect. As a thrifty Consumer, you must start the search for more efficient ways to run your family's home budget. The pay back would be terrific.

You have to start somewhere and a budgeting worksheet can make the dreaded task of budgeting much easier. Whether you use computer based software or plan to keep your budget on paper, a worksheet can help you to brainstorm the categories you will need to budget for. While most of them will be slightly different than the budget you eventually come up with, they can serve as a helpful tool that will make the entire process much easier.

You can find several varieties of a budgeting worksheet online that you can print or use as a template in one of your existing programs. Even if you just use it to get ideas, it can be a big help when you sit down to create a money management plan. While not everyone has the same income and expense circumstances, this type of worksheet is a great place to start.

If you do find a budgeting worksheet that you like, you can simply add categories to it or replace the ones you won't use with your own items. For example, many of these worksheets that you will find online have a place for investment income but if you don't have any investments to track either ignore that category or replace it with one of your own.

Once you view a few of these templates, you may realize that you have more categories of spending than you thought. For example, when first creating a budget, many people forget all about gifts, subscriptions, and pet expenses but by working with one of the preprinted templates, you may remember additional expenses you need to consider.

Another good example of the benefits of using a template as you create your budget is the category labeled vacation. While most people don't budget for their vacation on a monthly basis on their budgeting worksheet, experts suggest that you incorporate all of your one time or annual expenses into a workable monthly budget. This way, when vacation time rolls around, you will already have all the funds you need. Think of the other one time or annual expenses in your financial picture that you may need to plan for on a monthly basis.

By incorporating virtually every expense into your monthly budget, you can rest assured that all of your obligations will be taken care of. Look online for examples of a budgeting worksheet that you can use to get started. Many of these are free and you will most likely find that they make the task of creating a budget much easier.

Budgeting. Many of us tend to think that budgeting software is for those over-cautious individuals who like to keep track of all their money down to the last dime, and could probably be compared to the fabled merchant of Venice in extracting blood from the last pound. If you are in this group, or even one of those who shirk from budgeting thinking it's too difficult, and not really necessary for someone with simple needs and finances, then this should serve as a wake up call. Millions all over the world, and especially in the US, lost most of their life's savings in the recent economic downturn. This was because many felt their jobs were secure and they took on a lot more debt with large houses and luxury autos, as well as careless spending. If you think budgeting is not for you, then clearly, it is time to revisit this matter and give it very serious consideration: budgeting is for everybody.

The reasons aren't really hard to guess. As has been pointed out, budgeting does help you keep track of your money, but that is not all of it. If you budget your resources in a careful manner, then not only do you know where your money is going, you also acquire and develop strategies to optimize your expenditures and reduce your debt. Ultimately, through solid investments, a sound economic future for you and your family can be attained. It may sound old-fashioned and perhaps prudish, but good budgeting systems have proved to be invaluable for many individuals who have weathered some severe economic times and have survived quite well.

Here's how. Most individuals see budgeting in two ways: you either choose to take command and do everything yourself with spreadsheets, etc., or leave everything to an expert or a service provider. What we would like to recommend, however, is the proverbial middle of the road, which keeps you involved in decision making without leaving you out in the cold or at the mercy of plans and spreadsheets. Yes, we are talking about user friendly, smart budgeting software.

The logic behind budgeting software is simplicity itself. You buy the software, install it on your machine, run through the setup and feed in all of your financial details and specifications in the slots indicated. This last area allows you to choose parameters in accordance with your existing financial situation, an option which many conventional advisers and budgeting service providers lack. We recommend budgeting programs that utilize the "zero-sum" method of creating your personal budget. Basically, the concept is to take your previous month income, and from that amount, set up your budget expenditures for the current month. It generally allocates funds similar to envelope budgeting and you can include accounts to save for future purchases as well as reduction of debt. In this method, you know exactly what you have to spend, not like most programs where you are guessing what your income will be.

With this plan in hand, you then interact more with the budgeting software to generate clear cut strategies for the optimization of your expenditures. This means that you assign every last dollar to a particular area of spending and create a budget for both the short and the long term, meaning that you give "every dollar a job". Last, but not least, most software programs come with audio-visual aid such as graphs, pie charts and interactive commands, but the budgeting software program that we highly recommend on our website, provides live interactive training during the month, and also has an active member forum dispensing help whenever needed. So, please don't delay this very important decision any longer, gather your financial information, and prepare your budget.

Budgeting is not an easy task, especially when you do not have enough money to budget in the very first place. A lot of families and individuals are actually facing a grave problem of how they will be able to make both ends meet, especially now when the prices of almost everything are skyrocketing. Good thing there are now plenty of tools that will be able to help you out in budgeting, a task that can be frustrating, depressing and tedious all at the same time.

At present, there is no longer a need to get the services of the best accountant or tax adviser just so you can plan and analyze the status of your finances. You can now do things all by yourself, and that would be through the help of a budget template.

The budgeting template will be able to tell you where you are actually as far as your finances are concerned. It is very useful in those instances when you will have to budget and obviously, budgeting is very much needed if you are after managing your money to your utmost best.

People usually feel that it is a must to make the most out of every single thing and this is very much applicable even to using the budget template. While there are free budget templates, there are also a lot of other paid budget templates that come with great features, although in this aspect, less is sometimes more.

In a budget template, you will list down all the accounts that you have and this will surely allow you to have more savings. The chances of getting debts is actually very small since you can easily check the exact money that you still have to make it work for your expenses.

What are the other reasons why you need to use a budget template?

First, you will be able to know the current situation of your status in numeric terms using best budget software/budget template. You will be able to check if your income is actually covering your expenses and as well as your other liabilities. These are the factors that determine the present results and positions of your finances. And with this, you will be able to easily predict what might happen in the near future or you can also start setting your goals depending on the results in the present.

If you are also planning to open your own business, you will definitely need some money as capital. And as far as the needed capital is needed, you should apply for a certain loan from a lender or bank. Such institutions will be more than happy in paying more depending on the ability that you have and they will surely be interested in knowing how you are actually managing your finances. When you can prove them that you are good in managing your finances, you will definitely get an approved application.

Through the use of a budget template, you will definitely make the most out of your money.

When it comes to business, budget is a word we use a lot. You need a budget to know what you want to spend. You need a budget to keep it all in line so that you are able to actually earn a profit. Without a budget, you simply spend more money right?

Well actually, there are one of two things that happen when you have no budget:

1. Your company spends and spends with no regard for costs or future planning
2. Your company spends nothing

Whether you are talking about uncontrolled spending or no spending in business, issues are likely. Either way, you have a problem. If you spend too much, you are hurting the business and by cutting into profits and keeping expenses high. If you spend nothing, what services are you missing out on? Your business may not be equipped as it should be or lacking something that it needs to succeed.

That is the case when I see companies fail to budget for business needs. No matter what the tool, system or training, if you don't use it, you won't get the benefits from it. While there are things that hold more value than others, I have yet to see a legitimate business product or service that wasn't designed to improve the way you operate. It may not always save your company money, but the goals are usually centered around making your company more money or providing tools to save time or make things easier to manage. The point is, it pays to budget for business improvements. It pays to budget for business needs in general.

Wellness is a business need. When you have a wellness program up and running within your company, you are able to save money on healthcare costs, keep employees at work and productive while they are there and attract more good people that want to work in a healthy, energetic environment. These things do not come automatically. They are the results of a plan to strategically make them happen.

In order to make anything happen, you need a plan. Part of planning in any area of business is coming up with a budget. You have to decide what resources are going into a solution before you start implementing that solution. Just like any other resource, if you don't set a budget, you either spend way too much and it is difficult to show a return on your investment.

This is common, but I don't worry about it as much. The fact that a company is doing something usually makes them successful to some degree. It is important to note that the more detailed the plan, the better the results. It is still possible to spend too much. A company just getting started doesn't need a robust system that involves a great deal of technology, tracking, reporting or otherwise. A company just getting started needs to get started. Getting started is more about planning than spending.

What happens when a company doesn't spend anything? That is the second problem that can arise from no budget. If there is no budget set aside, your company won't spend money on something. No matter how much you want to do it, see value in it or know you should do it, without a budget, it won't fit into your plans and your company won't invest in it.

This usually leads to prolonged pre-planning, frustration and foot-dragging when it comes time to start again. Each time the idea comes up and discussions ensue, without talks of a budget, the conversation will only go so far and therefore the actions and results you can hope for are only going to go so far.

Not having a budget is more dangerous than most companies think. When it comes to wellness, there is an obvious need to create change across your organization. If that change is not created, there are major consequences coming in the very near future. These consequences will continue to come, they will grow and they will not go away. That is well-established.

We've seen the healthcare trend and what it means to businesses. Employees are becoming more and more dependent on health insurance and other medical products or procedures. This is costing companies more and more money every year. That is why we are creating wellness programs. If we can help employees live healthier, they can use less health care and save companies money. This is not a new fact and it is not something that will go away.

There is actually another consequence of not having a budget:

- Paying more because you are trying to fix problems rather than moving forward with a planned budget

It starts with not having a budget, but it continues to get worse. If you have no budget, you are not planning on spending anything. But, what happens when you are forced to spend on something? You have to pay a bill or cover an expense, no matter what you had "planned" on paying or not paying. If it comes due, you owe it.

Health insurance is doing this to every company on the planet. Every year, businesses are covering some or all of the health insurance coverage for employees.
If they used more than the premiums, the rates increase and they are paying more next year. There is more to it than that, but that is one simple way to look at it.

Unfortunately, many businesses are not looking at it this way yet. That is why they don't have a budget for wellness. They don't have a plan to start containing costs. This can lead to more problems. The costs keep rising, but if you don't have a plan to contain them, what are your choices? You only have one choice: pay more.

And paying more is what most businesses do when they fail to create a budget. The problems to that arise are not controlled and not planned for. This is a recipe for disaster. When you try to clean up the mess after an unforeseen disaster, it is always more difficult and more costly to do. It also has a larger negative impact on your business.

If you know why something costs more, you take action and do what it takes to save. This is true in any area of life and business. That is why a wellness budget makes sense. You are taking action in an area that you know will impact a rising cost. That cost is rising every year. By not budgeting to slow this rise, you are saying that you are OK with the rise. Or at least you are saying that it isn't important enough to create a budget.

When it comes to wellness, a budget is not just spending. A wellness budget is an investment and a safeguard against rising costs. If you know something costs more, you figure out how to save. It makes sense in any business. You need a plan. A budget is part of any smart business plan and is critical to the success of a wellness program.

According to the Federal Reserve Bank, 40% of American families spend more than they earn and more than 2 million American homes carry more than $20,000 in credit card debt. Frequently, these individuals are not wildly irresponsible. Rather, they are misguided spenders, unaware that there are budget programs available to ease their financial burdens.

For these and other individuals seeking an easy, affordable answer to balance their household budget comes the system PC World exclaims "sets the standard of excellence!" An online budgeting software program is the award-winning system that helps individuals track their spending, observe personal financial trends, and predict future monetary needs.

Don't think you need a personal budget program? Think again! This online accountant isn't just for millionaires. It's for anyone seeking to improve their personal finances. Indeed, an online budgeting software program bolsters the bank account by improving the management of the individual's money, revealing sources of wealth that may have otherwise gone unnoticed. Imagine recovering 10% of your income from wasteful spending such as previous debt or ineffective credit card spending management.

One in ten consumers has more than 10 credit cards in their wallets. Without a reliable system, it is very easy to lose track of spending on multiple credit cards. At the end of the month, an individual may think they are in the clear, but then a final credit card bill appears in their mailbox to bury them in a landslide of debt again. This is where an online budgeting software program again comes to the rescue by tracking spending, so any purchases made on a credit card show up instantly in the budget program.

Act now! The worst thing a person in debt can do is wait. According to American Consumer Credit Counseling, the average credit card interest rate is about 18.9%. Credit card companies make 75% of their revenues from finance charges, which enormously ratchet up your overall debt if you delay paying the full monthly balance. Ignoring a financial problem is the worst way to deal with it. An online budgeting software program is an affordable, easy way to nip your money problems in the bud.

Within the first few minutes after purchase, the program displays how much the householder can spend per month, and thereafter they can access their personal budget from anywhere: home or work. This allows one to be deliberate and strategic when dealing with their financial needs. Never again will they wonder how much they can spend on certain items, or dread what will arrive in the mail.

Just as it is never too soon to deal with debt, an individual is never too young or old to repair damage done to their personal credit score. Whether a college student or a retiree, an online budgeting software program is the solution for anyone in need of a personal budget. Credit is the gateway to your future. Without a good credit score, it is very difficult to make large, important purchases like a vehicle or a home. Even when renting an apartment, landlords check credit scores to see if a potential renter is a reliable individual. Years of missed payments and credit card debt damages a person's personal credit score, but with the consistent usage of an online budgeting software program, they can begin to reverse those years of damage. The program notifies its user of payments, credit card debt, and reveals a larger monthly budget to adhere by. This combination keeps the householder on the track toward financial freedom. You can also pay bills online and track your investments.

Truly, there is no price one can place on peace of mind. A poor credit score can ruin a person's life, but it is possible to reverse such misfortune and head towards a better tomorrow. Imagine living without financial burden, free of all debt and worries. This type of program has helped thousands of people improve the quality of their lives by easing their financial burdens. Join the thousands of other satisfied individuals and try an online budgeting software program by taking advantage of a free trial today!

Oh, oh, looks like it's budgeting time again. Whoever had any training in how to do this? Sure you've always managed your personal money fairly well, but now the company is asking you to create a budget that will take care of your team for the next year. Oh, and it's due tomorrow. What's an IT manager to do?

Just What The Heck Is Budgeting Anyway?

Sure we all like to kick the term "budget" around a lot, but just exactly is one? It turns out that the best way to think of a budget is to picture it as being a plan. Admittedly it's a plan that's based on money.

Your company has objectives that they want to accomplish during the upcoming year. These objectives filter down to the IT department and then travel even farther down to your IT team. Creating budgets is a part of the leadership responsibilities that you have as an IT manager. The budget that you are being asked to create is basically your plan for how your IT team is going to accomplish your part of the company's objectives for this year.

Ultimately, the budget that you create is where the "rubber meets the road" - those lofty strategic goals that the management guys running the show dreamed up get boiled down into a specific action plan when you create your team's budget.

The Four Functions Of An IT Budget

If a budget is a plan, then it's purpose for being is not to sit on a shelf. Rather, the reason that you go to the effort of creating a budget is to provide yourself with a tool that you can use to help your dream team accomplish things this year.

The budget that you create is going to have four primary functions. Each of these functions is going to play a role in helping your team to make progress towards achieving its objectives.

• Planning: What would any budget creation process be without planning? There are 3 steps that go into planning your next IT budget. The first is to choose your team's goals. You need to know what you want to accomplish. Next you need to evaluate your options and predict your results. Not all of your options are the same and each has a different possible outcome. Finally, you need to pick an option. Use your analysis of the various costs and benefits associated with each of your options and pick the option that has the best chance of allowing you to achieve your goal.


• Coordinating & Communicating: It's a good bet that your IT team won't be working on just one project during the upcoming year. Multiple projects means that you'll be needing to have multiple budgets. Ultimately, each of these individual budgets will need to be brought together and merged into one budget for your team. Coordination is required in order to make sure that you've gotten all of the various pieces and parts that you'll need. Communication will be required as you make sure that your team's plans will mesh well with the plans of other teams in your department.


• Monitoring: All too often new IT managers believe that an IT team's budget is just something that you throw together at the beginning of the year and then don't look at again until you start to put the following year's budget together. It turns out that a budget is a tool that you can use to monitor your team's progress. This is done by comparing your team's actual results with the budget that you created. If things start to go off track, then it's your job as a manager to take corrective actions.


• Evaluating: Ultimately how good of a manager you are can be evaluated by taking a look at how well your team lived up to the plan that you laid out for them in your budget. Your performance will be evaluated by comparing the actual results of your team to the budget that you created for a given period.

What All Of This Means For You

When you are asked to create a budget for your IT team, there is no reason for you to panic. Instead, you need to understand that what you are really being asked to do is to create a plan for how your team is going to play a role in helping the company to achieve its objectives for the upcoming year.

The budget that you create is a plan. This means that you can use it to make sure that your team will be able to successfully accomplish its goals this year. Your plan will allow you to do planning for your team, coordinate the funding of multiple projects while communicating with other teams in your department, monitoring the progress of your team, and having your performance evaluated.

Creating and using budgets is a way of life for IT managers. Instead of either fearing or dreading this task, take the time to become good at doing it. Remember that as your IT career progresses, budgets will become an even larger part of what you spend your time doing...

It is easy to lose a lot of money fast with AdWords, but there are tools in place to prevent the carnage. Even if you are spending only $5 a day, you should know about, use and understand how daily and monthly budgets work.

Daily and monthly budgets are set at the campaign level. You can change them by going into campaign settings, finding the budget fields, entering the changes and clicking "save". I usually leave the page and then go back in to make sure the save took -- probably an unnecessary step, but it is better to be safe than sorry.

Daily Budget

This setting lets you control how much you spend per day in the campaign. It is not an exact measurement -- the AdWords system has some flexibility built in to allow for the inevitable changes in traffic volume "weather". So your actual daily spend can be up to 20% more than your daily budget. If you do overspend on any day, though, the AdWords system will reduce your spend by the same amount you overspent at some time over the remainder of the month. If this balancing-out happens early in the month, you'll probably never notice it. If it happens in the last few days of the month, you might.

The exact formula AdWords uses for the daily budget is the value of your daily budget times however many days there are in the month in question. So if your daily budget is $100, and there are 31 days in the month, you'll spend $3100 (up to $3100). Assuming you spent exactly $100 all the prior days of the month, and then overspent on the 30th by 20%, then on the 31st AdWords would slow your ad serving so that you hit as close to $80 on the 31st as they could get you.

If you spend more than this formula, AdWords will credit your account for the overspend. Don't get too excited, though -- I've never seen an advertiser get credited for overspend in 5 years of managing PPC accounts.

Monthly Budget

The monthly budget is very similar to the daily budget, but instead of entering a budget mark per day, you enter it for the month. Then the AdWords system divides that monthly budget by 30.44 (the average number of days in each month) and you've got the old familiar daily budget again. The AdWords system will try to stick to this daily figure, but if you've only entered a monthly budget, the system will now allow much more fluctuation in the daily spend than would have been allowed with setting only a daily budget. So if your traffic tends to spike up and down, the monthly budget option is for you.

One caveat about the monthly budget -- if you reduce it, you may see a significant drop in your adspend over the rest of the month. For example, if your monthly budget was $3100, and you dropped it to $2000 on the 16th of the month, for the rest of the month you would get only $30 a day in clicks. Why? Because as of the end of the 15th, you'd spent $1550. When you change your monthly budget to $2000, you have only $450 left in budget for the month, so for the remaining 15 days your daily spend is curtailed to $30 a day. To avoid this, change your monthly budget on the first day of the month.

Advanced Trick

If your AdWords account is profitable and you're looking for ways to put more money into your cash machine -- ie, get more clicks -- try increasing your budgets by 50% to 200%. This will take off the safety measure, so you will need to know that your spending is safe because your keyword bids are correct, but opening up the budget will let the AdWords algorithm show your ads more freely. Its an easy fix to seriously increase impressions, but it may take a few days for the AdWords system to really start ramping up your impressions.

A budget should be a living structure, changing and modifying itself to adapt to your changing circumstances. An outmoded budget is worse than ill-fitting clothes; the clothes you can go and change, but the budget takes longer. And, just as ill-fitting shoes can cause blisters, an ill-fitting budget can cause financial problems, both immediate and long-term.

However, you do not want to be changing your budget every day. A budget that is so fluid as to change from day to day is no budget at all. There is no commitment, and there are no results, from such a budget; it is worthless. You want your budget to guide you in your choices, not the other way around.

The best time frame for a continuing budget is monthly. Determine your budget at the beginning of the month, and then use those decisions to guide your choices over the course of the month. Trying to run a budget on a smaller time frame means that you will miss important factors. Your income is determined either bi-weekly or monthly (usually), your expenses are often monthly, so your budget should cover a month as well.

But even a monthly budget should not be changed every month. Your budget is designed with a purpose in mind, and those purposes last longer than a month. Whether it is retirement, a new home, a vacation, or even a purchase of an entertainment system, you are probably planning for longer than a month. So even if a budget uses the month as its time frame, the budget should be used for more than a month to evaluate its effectiveness. So the question remains, when should you review and revise your budget?

Creating Your Budget

The process of creating your budget should take at least two months and probably three. The reason that one month is not enough to create a budget is that the month in question may have some unexpected or unusual components. Maybe that is the month you received an annual bonus. Maybe that is the month you had to pay your property taxes. Maybe you had a hospital visit, or a car repair, or a yard sale. For whatever reason, one month is not enough data. Most experts agree you should look at two or three months to actually create your budget. That means that during the creation process, you need to revise your budget monthly. Then, once the creation process is set, you can let the budget ride for a while.

Ongoing Revision Times

Depending on your purposes, you should revisit your budget at either six, nine, or twelve months. The more immediate the purposes served, the shorter the time frame. If you are looking at a vacation plan which will happen within the year, evaluate the effectiveness of the budget after six months. If you are working towards the purchase of a house, probably twelve months is better. The longer you use a particular budget, the clearer the results will be.

Major Changes

The other reason you should revisit your budget is when a major change occurs. If you get a raise, or a new job, that would be a good time to revisit your budget. If your child moves out of the house to college or to their own living arrangements, your can revisit your budget. If you get a new car, refinance your house, or make a major purchase, these can all indicate that your budget should be revisited.

Why Make Changes

The whole purpose of revisiting your budget is to see if your previous decisions are still worthwhile. Do not change your budget simply for the sake of something new, but to reflect changes in your goals and purposes. Document your reasons, so that when you look at your budget six months to a year down the road, you can test your results against those reasons.

Your budget should not be the guiding force of your life; that role is reserved for your goals and dreams. Your budget is a tool to implement those goals and dreams. Revisiting your budget is to evaluate whether your budget is fulfilling that role.

Budget
Before understanding the key concepts of budgeting, it is important to understand the meaning of budget. A budget is used to make a documentation of the translation of plans into money. So, the amount of money that needs to be spent in the planned strategies of the company would lie under the budget of that company. These planned strategies include the expenditure that a company incurs and also the income that the company predicts to make. So, in other words, a budget helps one to make an estimation of the amount of money that would be required for the company to handle the projects undertaken by it. It must also be understood that a budget is not made permanently. There are conditions under which a company can make changes in the budget and go as per as the needs of the market. As for example, if a company sees that the use of computers is not as had been planned in the budgeting; it would either replace it with something or not make any investment at all in the field. This is where the utility of controlling comes into the picture. Other than this a budget is also significant from other perspectives. If one talks about the resource allocation, budget has an equally important role to play in it. The reason for the same is that let's say that a company has budgeted that it can afford a certain amount of power supply for a certain project that is conducted in a village. Under the conditions, the amount of human resource that would be required to carry out the project can be determined from the budget itself. Normally a budget is of three types. They have been mentioned as follows:

Survival Budget: This form of budgeting is important in the boundary conditions. It estimates the minimum resources so as to complete a particular project. So, if a company has a look at the survival project, there is one obvious analysis that can be done. This is that under the most optimistic of the situations, the resources allocated would be sufficient. There would be very little margin of error under the conditions.

Guaranteed Budget: This budget is formulated when there is a guarantee of a particular amount of income at the time of formulation of budget. So, when a budget is made from this perspective, this income is taken into consideration. If somehow, the debtors are not able to provide the income that the company used as guarantee before making the budget, it would have to switch over to the survival budget formation.

Optimal Budget: The third form of budget is the optimal budget. This budget is used under the conditions when there is extra money in the company accounts or else the company feels that it could raise extra money from the market. So, if the position of the company is good then this form of budgeting can be applied. As for example if we consider a very famous company in the infrastructure sector, Emaar, we would find that the company has the ability to raise a lot of extra capital from the market. So, Emaar can hope to use it in utilizing the money to plan a few more interesting projects like it had made the longest mall in the world and the tallest tower in the world. Both these projects were outcomes of an optimal budget made by the company.

Budgeting Responsibilities
Owing to the circumstances under which a budget is fruitful, the organizations should be highly selective in handing over the responsibilities of making the budget. There are a few pre-requisites of making a budget. They are as follows:

The concerned employee should have a clear understanding of the company's values, strategies, and plans that lie in the near future.
The employees must know the importance of cost-efficiency and cost-effectiveness.
Also, the concerned employee must have knowledge about the resources that would be used to generate and raise funds.
The above pre-requisites are essential for the company if they have the motive of using budgeting in the planning, controlling and resource allocation purposes.

So, it is generally recommended that a company has a budgeting team that has an optimal size so as to prevent any discrepancy with the formation of the budget. Under all situations where the concerned members of the finance department have difficulties in planning the budget, they would have to consult the board of members for the same. For a situation like this to arise, the planning in the company must certainly have been wrong. So, we can see that the new planning would depend solely on the fact that budget allows the same to happen. Under all other conditions, the estimated plan would have to change. (Budgeting, 2010)

Role of Budgeting in Planning
Here we are taking the telecommunication giant, DU into account to understand the role played by budgeting in the planning process. It was only about a couple of years ago that the company introduced its new plan. This new plan was about introducing the pay-by-the second plan amongst the services of the company. This was done as per as the optimal budget plan of the company. DU had formulated a budget where it got the option of introducing a new facility with the extra money that it hand in hand. As the company analysis shows that DU was climbing the ladders of success even then, so this was certainly a major step in the making. Moreover, the funds that had been allocated in the budget were enough for the fact that the company could start this service any time it wanted. So, it chose the time when the nearest rival company Etisalat had screwed up its plans after introducing the Blackberry services. As an optimal budget is that which allows the time for starting a new investment, this was just the time and DU made the most of the opportunity. Today this plan is among the most revenue-fetching plans that the company had ever introduced in its services. So, budget played an extremely important role in the planning of this success of the firm. Had the company planned to use the extra money as a surplus or retained or reserve, it would never have been able to introduce this service. So, one can see the importance of making the right budget at the right time can help in planning for great successes in a company. There are other examples also where one can see the planning being aided by preparation of budget. The tourism department of Abu Dhabi was guaranteed of the fact that it would have a considerable amount of income from the flourishing tourism in the country due to the onset of some of the most peculiar activities in the country. Under the situation, the department used the guaranteed budget to enhance the cultural activities of the country. A number of museums have been renovated because of a planned budgeting under the guaranteed budget plan. The department had planned that with the money they would have from the already existing resources in tourism, it would evoke a cultural feeling in the country and its natives, It has been able to do it successfully as per as the statistics of the museums of the region are concerned. So, once again we see that budgeting has helped in planning of such an important landmark in the country.

As in general one can say that budgeting is about aiding a company to make plans for the future. It is that process where a company can be assured of the fact that it would have enough money so as to carry out the requisite projects. We are all acquainted with the fact that the world is about competition as of today. Every company needs to plan new projects so as to show its core competency. Under the conditions, no company can automatically start investing on its research and development. It has to come through a substantial degree of planning which could only be possible after the budget of the company allows it to do so. In all other situations it would finally have to terminate the services with an excess of demand or supply.

There are also other instances where a company can use the principles of budgeting in order to carry out its planning. This can be seen in the case of training. Every planning of training has to be supported by budget. This is one of the foremost criteria of training. There are a number of instances in the country where the Government is implementing programs like Emiritzation. If the budget of the company does not support such plans they would certainly not be executed. The loss can be huge under the conditions. The first case would be a monetary loss as an incomplete training would actually be of no used as it would be insufficient to fulfill the company's criteria. If some small companies do place employees with an incomplete bit of training, it would make the company even smaller!
So, we can see how budgeting governs this chain of planning which of not executed in a suitable manner could bring about adverse results. (The Importance of Budgeting, 2010)

Role of Budgeting in Controlling
As in the case of planning, budgeting also has a special role to play in controlling of an organization. We have seen that a plan would simply lay the conditions of taking on a particular activity. What follows is its controlling in the implementation phase. Let's say that a company wishes to promote its products or services in the trade fare of Dubai. This is one of the places where controlling comes into play with respect to budgeting. Dubai Trade Fare is one of those occasions when a number of companies use the best of means to promote their products. With an adequate amount of control, the companies would never be able to compete in the pool of so many. So, a budgeting has to be done to choose the HR and marketing department which would be responsible to control the scenario.

Without a proper budgeting in this respect, the company would make inefficient decisions and after a while, there would be no control over the promotional measures of the company.

There are also a number of chances where a company goes with leisure expenses. It does increase the value of the company for a particular period of time but after a while there has to be an end to it. Now, with a planned budget under the conditions, the companies would be able to restrict themselves from over-spending as the budget would not suit their expenditure. This requires the company to make a survival budget. As we can see a survival budget would certainly take care of the budgeting requirements of the company. If the employees are aware of the fact that they would not be able to complete their respective projects with the type of expenditure they are doing, they would certainly shift to other economic reasons. This way a company can also control the activities of the employees. Once a planned budget is produced the whereabouts of the employees can also be checked as they would be on a hire. The amount of time given to them in the budget would be fixed. If they are unable to finish their respective works in this stipulated time they would see the effect on their salaries or wages. So, this way, the company's activities, employees, time and money can all be under control with the introduction of budget in the company's financial plan. The company would certainly become more efficient if it works in a controlled manner. So, this would be for the mutual benefit of both the employees and the company as well. (Controlling a Budget, 2010)

Role of Budgeting in Resource Allocation
A company's success is highly dependent on the resource allocation. This has to be done optimally so as to complete a certain project. The law of economics suggests that a company has the least resources and has to make the most of it. So, only an appropriate resource allocation would help this happen. This would be in terms of human resource, raw materials, equipments, money, time and all other attributes that take for making a project successful. Here again, the budgeting of the company plays an important role to play. The reason for the same is that in all the sectors that have been talked about here, only a planned budget could decide the maximum a company can afford. Let's say that ADNOC has the plan of staring a new subsidiary. Under the conditions, it would have to make a budget where the company could allocate the amount of human resources in order to make this happen. Not only this, there are a series of activities that would have to be done in the process. Much of the time, there would be two processes going on and at times even one. So, a planned budget would estimate the amount of money that the company can afford throughout the process. Based on this, the processes would have to be allocated in a manner where the company can make the best use of the human resource available. If ADNOC has 200,000 AED for the purpose, and there are 10 slots, rather than allocating 20,000 AED per slot, the company would have to see the priorities of each slot. If a particular slot requires double the number of processes than the others, the resources would have to be allocated accordingly for the same. Now this can only be possible with an appropriate amount of budgeting. If the budget of the company does not allow double resource allocation for a particular slot because of other activities, then the company would have to come up with other alternatives. Had there been an inability of a budget, the company would allocate double resources and finally land up with none available for a process that has little requirement. So, we can see that even the process of resource allocation requires budgeting to a large degree.

Talking about the company Emaar, as per as the organizational size of the company, there has to be a proper budgeting done. The reason for the same is that every department requires an adequate amount of human resource and funds. If the company's budget for a particular project is 200 million AED, the company would also have this budget divided into different departments. Every department would have to use only the allocated funds to support its human resource and all other requisites prior to conducting the project. If the construction department spends so much that the company is not able to use any funds for its advertisement, in this world of competition, even a company like Emaar would have to bow down to others in the league. There are so many options that people have for residents that promotion under forced conditions could change every profitability ratio of Emaar. So, here again we see the hierarchy that could be affected because of the inappropriate use of resources that would result from the non-availability of a budget that could suit the purpose. (The Basic Budgeting Problem, 2010)

Conclusion
So, one can see that a budgeting process has a number of utilities in the projects of a company. This could be from the perspective of planning, controlling or resource allocation. Every company has the desire to be at the top. Finance has a special role to play in the same. Te steps of laying down an appropriate budget are as follows:

Firstly, the concerned person should lay down all the places of investment with respect to a particular project.
Next, make an estimation of the unit cost of every product that would be manufactured in the process.
Next, analyze the resources that would be sufficient to provide for the unit costs found.
Next make a proper budget format so that it is clear to all the departments and they the amount of allocation for them in all the respects.
It is also advisable to make notes so as to be able to explain the budget better.
Next, it is required to take a feedback on the budget so as to see whether it is applicable to all the departments or not. If not, then it would have to be re-planned.
Finally, make the final documentation so as to be able to help in planning, controlling and resource allocation as has been suggested earlier.

With all the above processes followed, a company can afford to perform all the financial activities in its respective projects. It must be remembered that only a systematic design of budget as has been concluded could be used for the mentioned cause.

As the year winds down, many businesses shift their focus to future and begin preparing next years annual budget. HOA and Condo Associations are no different as we are currently wrapping our budget season for this year.

We have prepared thousands of community association budgets over our 25 years and have developed some specific strategies for preparing an accurate HOA budget. We have come up with 10 tips for preparing an HOA budget.

Do a budget - I know this seems like a silly tip, but we have seen many associations fail to create a budget before proceeding to the next year. An HOA is just like any other business or organization. If you don't have a financial plan, you will find yourself a in a mess about halfway through the year when you realize that you don't have enough funds to make it through the entire year. Take the time to practice financial responsibility for your association.

Review budget and Financial History - You always want to review the previous two years financials to fully understand were you currently are vs. where you want your association to be. Many people review previous year's budgets to prepare future ones. One problem we see is that many people despite reviewing past numbers, fail to make the proper budget corrections when something is way over or under budget from the previous year. Make the proper adjustments to insure an accurate budget.

Prioritize projects - We have worked with any HOA and condo associations that get overwhelmed during budget time because they have so many repairs and projects that they want to handle all at once. Any kind of future projects or repairs, need to be prioritized accordingly. This is where you must separate your associations needs vs. wants. Everyone wants the landscaping or condo exteriors to look immaculate, but no one gets excited repairing an unsafe stairwell repairing a leaking sprinkler system. You must eliminate any safety or potential liabilities before exploring any community beatification projects.

Utility Increases - We can't recall a time in which utility costs actually went down from the previous year in our 25 years plus experience. Water, gas, and electricity costs have been increasing steadily over the last decade, especially water costs over the last 2 years. We always research our local city and municipalities to see if they have a price rate schedule available. For example the City of Austin is scheduled to increase water costs 70% over the next five years. Because we are aware of this price hikes, we obviously budget for them accordingly. If no information is available, we suggest increasing the budget on most utilities between 5% to 7% each year.

Vendor Contracts - You always want to insure the correct budgeting for all of your normal monthly service providers. Don't be afraid to ask your landscaping company, pool contractor, and even management company, if they plan on changing their current rates. This is also a great opportunity to ask for their updated insurance information to make sure that is good standing as well. Also review current contacts to see if there are any CPI index clauses in their agreement. Nine times out of ten, if they are contractually able to increase their fees, most will do so.

Budget for reserves - All associations should budget for a percentage of all income to go to their reserve or savings accounts. The percentage of income will of course vary depending on your association. The more long term liabilities and obligations you have, the more you should be putting away. We have some condo associations that are putting away as much as 20% of their total income towards long term savings. Condos generally have much larger financial obligations including exterior repairs and upkeep and maintaining private streets and roads. Not budgeting for reserves can lead to be big problems and potentially big special assessments down the road.

Cover your Insurance deductibles - All condo associations need to pay special attention to this one. Make sure you are aware of the deductible levels for different elements of your complex. For example, if your roof replacement deductible is $500.00 per building and you have 20 buildings, then you need then or course you always need at least $10,000 in your reserves to cover that amount. If a disaster or violent storm strikes your area, you want to make sure your association is ready and that you are not hitting them up for a special assessment just to cover basic insurance claims.

Evaluate legal and collection costs - Legal and collections costs can escalate very quickly depending on the collection strategy that you use. Evaluate your current system and see if you can determine your return on investment. If you are on average spending $150 dollars to collect every $100, then something obviously isn't working. We have experienced great success with providing homeowners that are behind with a payment plan with full payment schedule provided to them. When delinquent association members concentrate on affordable monthly payment and not the large amount that they owe, they tend to see the light at the end of tunnel.

Special Assessments are for special projects - We have heard many times suggested "Why can't we have a special assessment instead of raising our monthly dues?" This philosophy doesn't work in our book. If your association is having a problem meeting it expenses because of some tight cash flow, you need to raise your assessment amount or your assessment frequency. Special assessments are just that, special. They are not for paying your bills. They are intended for major improvements, or in a case of emergency repairs, not to pay the pool contractor.

Stay the course - It's real easy to get distracted throughout the year with landscaping improvements, new and improved security systems, and other random projects throughout the year. Your association made a budget for a reason, so try your best to stick to it as best you can. If you do have to make an unexpected expenditure, take your time and make the best decision for your HOA or condo association.

Creating and maintaining an HOA budget is essential part of maintaining a fiscally responsible association. Even associations that are not as healthy financially as they need to be, with some small modifications, they too can be financially fit in just a short amount of time. If you follow some basic steps and continue to evaluate and adjust over time, your community association will thrive financially now and in the years to come.

As a mom you are always aware of how your family spends and many times you find yourself creating a budget on paper, which is the easy part. Sticking to your budget is a definite challenge! It's great to have a budget written down but until you put it to action it is only just words on paper. You must make a willing effort to follow your planned budget. You can have and maintain a successful budget when you follow these five simple steps to stay on target.

Budget Commitment

Without your commitment to put to action your budget plan then all you are doing is just writing words on paper that will soon be tossed into the trash. Make it your daily purpose to review your expenses and income so there is always an understanding of where your finances stand, and a consistent reminder to stick to your goals.

Lifestyle Changes

Simple changes in your lifestyle can make it a lot easier to stay within your budget. Packing a lunch for work or school can save you up to five dollars plus a day. Multiply that by five to six days and that is 25 to 30 dollars a week. Multiply that by four weeks and that's $100 to $125 a month! Now you see how quickly that can all add up.

Make it a point to prepare yourself on a weekly basis before going to the supermarket. You start by planning your weekly meals and creating a shopping list that will be just what you need to make your meals. Take advantage of shopping days when a store is offering additional in-store savings. When you shop with a list you are less likely to overspend and stay within your planned and targeted budget.

Keep Your Focus on the End Goal

When you created your budget, you probably had an end goal in mind. Whether that goal was financial freedom, saving for a dream vacation, purchase of a new home, or simply getting out of living pay check to pay check. Write your initial goal on the top of your monthly budget as a daily reminder and motivator that you are doing all this to reach your end goal.

Think Before You Spend

When you go to shopping, venturing into a mall or store filled with the latest gadgets, or new clothing trends remind yourself of your end goal. Ask yourself this question: "Is this something that will help or hinder me from reaching my budget's end goal. In other words, is it something I need or want?" Learning to identify the difference between wants and needs is a huge step in accomplishing your end goal.

Pay Cash Not Credit

When you go shopping keep your credit cards at home. The amount that you pay in interest will rob you of your savings toward your end goal. Credit cards tend to give you a false sense of wealth when used outside of your purposed budget. If you don't have the cash, then it's probably something not worth buying. Remember, your desire is to stay on target with your budget, will be rewarded in the long run.

A budget is meant to give you the liberty to accomplish your real desires and keeping you free from the chains of debt that hold so many. Your desire to keep a budget is meant to make your life more enjoyable especially when you stay within your own guidelines.

Having a budget commitment where you are willing to have lifestyle changes to accomplish your end goal of thinking before you spend and pay with cash not credit, you will be well on your way to establish an maintain a successful budget.

Planning a wedding can be an enjoyable experience. One of the tasks that can take away from that enjoyment is worrying about money. So how can your get your budget organized from the beginning and relax knowing that you are going to be under budget?

Start the process early

One of the first things a bride can do is start a budget before you starting reserving venues and paying deposits. It is never too early to get started. And just because you start a budget does not mean that it has to be perfect the first time. In fact, I don't know anyone that came up with a perfect budget the first time.

Find a starting point

Do you know what type of wedding you would like? There is no need to plan the entire wedding at this point but it helps to have a general idea of how many guests you want to invite. Do you know how much money is going to be available to you? Financing generally comes from the bride's parents, but sometimes the bride and groom are the ones that pay for the wedding. Sit down and determine the amount that seems reasonable based on what money is available and the number of guests you want to invite. Money can be a source of anxiety for many people. But it is better to know that you only have $5,000 to spend before you go out and spend $20,000. Keep the lines of communication open about the budget and financing.

What is included in the budget?

The next thing you need to do is come up with a list of items to include in your budget. You can search the internet for a complete list of wedding budget items. Use the list you find as a starting point and modify it to suit your needs. Go through each of these items and mark a priority next to them. You want to be able to determine what is more important if the budget gets tight. If the videographer is the least important thing to you, then they may get cut.

Get Organized

Now that you are on your way, it is time to get organized. You can use a spread sheet program to organize your budget. Add in all the items that you decided would need to be included in your budget. Using a spread sheet program will give you the ability to categorize items and keep totals based on how you group items. This functionality will allow you to accurately keep track of your budget as well as make changes to see how different situations affect the overall budget.

Make some phone calls

Start to fill in your spread sheet with items which you know an approximate price. Just remember that this does not have to be exact at this stage of the planning process. But you do want to be in the ball park. You want to pick out a few places to call and get a quote. Start with the reception venue and catering since those could potentially be your biggest expenses. You may also call a few photographers, videographers, wedding planners, and florists. Make the phone call for any item for which you are uncertain of the cost. Do keep in mind that somethings vary greatly in price. One photographer may cost $2,000 while another is $6,000. Allocate more money to items you rated with a higher priority.

Once you complete the steps above, you should have a good starting place for a budget. Your budget is going to change as you start to shop and nail down prices. Give yourself a little cushion in your budget and prioritize items so you know how to adjust during the planning process.

Almost all well-run businesses and organizations prepare budgets at least annually. Unfortunately, very often, the budget process becomes more of a formality, required process, or activity, than a useful document. While budgets should be part of a careful and detailed process and analysis of a businesses or organizations needs, and how to get there, it is much more common that the budget is merely a "bunch of numbers" that "have to be" prepared, than anything useful. "Let's just prepare it and get it passed" is an often stated opinion. "It doesn't really matter, because we'll just change it if we need to anyway," is repeated ad nauseum, making the entire process little more than a waste of time and energy.

Dictionary.com defines "budget" as an "estimate of expected income and expenses, and when used as a "verb (used with object)," as "to allot (money, time, etc.). However, the definition does not detail the important functions that a properly prepared budget can and will provide. Budgets should not be merely a bunch of meaningless numbers that have been thrown together to prepare the document. Only if a budget has been prepared utilizing "zero based budgeting" does a budget reach its full potential.

When either preparing or reviewing a budget, first carefully review the income (or revenue) side. How has each line item been calculated? How does each number compared with the actual for each of the last three years? What methods, techniques, or "revenue growers" are to be used in this upcoming cycle? It is important to recognize, when one prepares a budget, to be very conservative with revenue or income estimates and projections, and very aggressive in calculating expenses.

Expense items need to be reviewed very carefully, item by item. Commonly, businesses or organizations use the "previous budget plus" concept, which means it simply takes what was spent (or even worse, projected to be spent) in the previous budget cycle, and a specified percentage is simply added across the board to most expense items. When budgets are prepared this way, they are truly the waste of time and effort mentioned above. However, when each item is analyzed on a "needs" and "effectiveness" basis, one often realizes that monies are expended in many areas that do not provide the required result, while in other areas, more funds may need to be spent. One then also develops the philosophy of "thinking outside the box," and developing creative methods to more effectively spend funds, or "get more bang for the buck." One using this method develops an important document that guides decision making, as well as provides direction. A properly prepared budget should not be revised during its cycle, unless there is some sort of emergency or other form of extraordinary circumstance.

Budgets should always include at least one realistic reserve fund. The reserve fund may be exclusively for unanticipated maintenance and repairs, or for some other unanticipated need. When budgets do not include reserves, they almost invariably need to be tweaked and readjusted during the cycle, thus weakening the intended and important purpose of a properly prepared budget.

Anyone who reviews a budget should ask a lot of questions, and request a detailed budget, as opposed to merely a summary budget. Some of these include; 1) What items make up that line item, and how are they broken down? 2) What alternatives were considered in this area? 3) Have we evaluated alternatives regarding utilities and telephone, etc.? 4) Which program worked the most effectively and why? 5) How do we market, and why do we market the way we do?

The above are simply a sample of some worthwhile questions. The most important thing to do is always ask questions about anything that you do not find clear. Do not be embarrassed - chances are if you find something confusing, so will others.

Budgets can be the most important process used by a business or organization, or simply an exercise. Each of us owe it to anything we believe in, to explore all alternatives and possibilities. Many nay-sayers like to state that "It's only a small amount. It won't amount to anything- it's not large enough." Nothing could be further from the truth. Budgets are refined by making many small adjustments in multiple areas. You'd be amazed how much the total of all these adjustments add up to. Think of the adage, "You know how you eat an elephant - one bite at a time!"