We often hear people saying that, ‘Failing to plan is planning to fail’. A budget is all about planning. A budget is important in our businesses as well as in our homes. A budget basically outlines how we intend to use our financial resources.
It is important to invest in a pen and book where you take note of all your spending over a period of time. In this era of technology, you may opt to use a high end user phone or a portable computer where you enter all items that you purchase. Whichever your preference, just make sure you do not forget to note your spending.
Small items such as a bar of chocolate, sweets, birthday cards or a match box may not seem significant but they do amount to a large amount at the end of a year. It is therefore important to note every little item that you purchase and indicate the date when you did the purchase.
At the end of every month, group and add up all related items and the amounts you spent on them. This clustering of items will let you know how much you use on household items, food, outdoor meals, and entertainment among other items.
Monitoring your expenses for a minimum of six months will indicate approximately how much you need for each clustered category of items. This also helps you to draw an almost perfect budget as you can easily see which items should be eliminated when your finances are low and which items should be added in case you have some available funds.
With good personal budgeting skills, the same principles can be applied in any business setting and bear exceptional results.
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