Most of us and other people venture into business opportunities with the aim of making profits , fitting in the competitive business environment , acquiring many customers and filling the gaps inn the market without having a proper plan for investment and knowledge on proper Budgeting .
Today we will be looking at good ways to plan and budget for your investments .
To begin with we must define a budget . Is an estimation of revenue and expenses or financial plan that takes into account revenues and expenses .
Types of budget
We have three types of budgets that is balanced , deficit and surplus budget .
Why budgeting is important ? .
It estimates revenues and expenditure plan and restricting spendings that is note part of the plan .
Budgeting ensures that money is allocated to those things that support the strategic objectives of the business .
Budgeting also enables us to understand the priorities of a business .A well communicated budget provides this information .
STEPS TO PUT A BUDGET PLAN .
There are steps to be followed in order to have a budget plan which is good to you .
Determine the income .
This income which is net is found after all deductions have been made where applicable .
Calculate the expenses .
Break up your monthly spendings into specific buckets for instance housing , Utilities and Food .
Calculate the difference between savings and expenses .
If the expenses are greater than savings then either make more money or spend less .
Look at your budget and determined what can be reduced .
You will be in a good position if savings are more than spendings .
Determine what to do with savings .
You have savings ! Congratulations .
Now find what best thing to do with the savings .
Make it a habit .
Aim to sticking to your budget by reviewing it every two weeks or one month .
This will help you understand how your spending is tracking what you need to change and if it is sticking to your financial plan.