The Budget vs. Expenses Comparison
- Author Elfira Irani
- Published September 25, 2010
- Word count 521
When drawing up a personal budget, it is important to be mindful of the differences between your idealized personal expenses and the actual personal expenses that your budget expresses exist. Be sure that you are not delusional in thinking that your cash expenses are "not that high" or that you do not spend that much money in light of your documented budget stating otherwise. You need to think about small items that you may purchase throughout the week as well as your larger fixed expenses. If you have adequate income to meet your expenses in terms of your fixed costs (for example mortgage payments) and your necessities (food, etc.), then you have planned your budget correctly. If the opposite is true, it is time to examine some of the variables in your personal budget.
The first factor to ensure a balanced budget is to make certain that your personal income is capable of covering your life costs and necessary money expenses. If this is not the case, you need more income to cover these key items. There is no point in budgeting if you do not have the money to provide paper on which to write the facts and figures, so make sure that you have enough financial capacity to demonstrate the responsibility of paying the necessary bills and procuring the necessary items with which to function as a human being.
Once this has been established, you can now move on to your budget in an official sense. Make sure you are aware of your expenses and how to counteract your expenses by drawing up an effective budget to allocate your cash. Your budget should exhibit all of your expenses, even the unknown ones such as emergencies and unforeseen circumstances, so that you are visually aware of where you stand financially at all times by simply taking a look at the documented information. From that point, you are able to see where you went wrong with your fiscal planning and what can be done in the future to prevent any mistakes.
Assuming you did not make any budget mistakes, you are not able to process the personal expenses aspect of your budget in an area beyond known costs and fixed costs. This is where the comparison of budget to actual expenses comes heavily into play because you are not comparing what is left with what is desired. For example, if you want to install a backyard swimming pool and you notice that your budget has you coming up with about a hundred dollars extra per month after all known and fixed expenses you may deduct that it is not such a good idea. This will also allow you to see whether you are in a position to gain a personal loan or pay day advance.
These types of comparisons are important because they allow you to see, literally, into the future of your fiscal situation and create a climate of financial responsibility that will last a lifetime if implemented correctly. Although drawing up a budget may not be the most exciting task, it really can help you become more financially organized.
There are no posted comments.
- The Only Economic Strategy That Systematically Lowers Your Taxes While Paying Off the National Debt
- Let's End Wage Slavery in the USA
- The role of AI in finance
- Adsense Pros And Cons
- Places You Can Save Money For Your Family
- Best ways to make money in 2019
- 5 Credit Hacks to Boost Your Credit Score Fast
- How The Fair Debt Collection Practices Act Works For You
- Real Estate Outlook May 2019
- What Your Dad Never Told You About Income Investing: Q & A
- Looking for interests from your investments? Intus Life!
- How To Get Wholesale Houses In 7 Days or Less
- Life Settlements: The Option of Selling Unwanted Life Insurance
- Do Stock Market Numbers Really Matter?
- Real Estate Outlook May 2018
- Harnessing Stock Market Volatility
- Real Estate Investment Outlook
- Health Insurance A Must For Everyone
- Managing The Retirement Income Portfolio: The Plan
- 5 Reasons to Hire a Financial Planner
- Why Retirement Planning Is Important
- Florida Online Deed Sales - 2017
- How to make money: 11 tips to learn how to invest your capital
- How Can You Build A Bigger Pension?
- 10 Things You Didn't Know About Millionaires of the 21st Century
- Finding the Good Real Estate Deals
- Only Action Will Create Wealth
- The Global Reset
- Commodity Prices Have Crashed
- What the Wealthy Do Different