Budget, what is it? |
What is included in a budget?A budget can be prepared by simply using pen or pencil and paper or if you prefer using software, there are several on the market including Quickbooks, Microsoft money and many others . In simple terms, a monthly budget should include:
For most people, that is where the whole process ends. However, if you were running a business, your projections would be for several months ahead. As you come to the end of every month, you review your figures and log your actual income and expense figures. If your actual expense figures are higher than projected, you may want to look at ways to cut costs for your business to stay profitable. If your income figures are higher than projected over a period of time, you may want to look into increasing staff or production capacity to cope with high demand for your products and service. For some of us, the closest form of budget we have been exposed to is the household monthly budget. This is the simplest form of a budget, in which case, the head of the household lists all things they are going to need for the month, log that against the household income. If the household needs exceed its income, then obviously, you have to look at cutting out all unnecessary or less critical items in order to make sure you are not living beyond your means. |
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