Determining causes and effects of not keeping a personal budget
Determining causes and effects of not keeping a personal budget
William E. David
ENG115- English Composition
Prof. Sandra McDonald March 10, 2015
It has been observed that most of the employees of Bank of America create individual budgets but do not keep a record of them. This is because most of the employees return to the bank for personal loans just two weeks after receiving their salaries. Due to this finding, the factory utilized financial analysts and decided to develop measures of controlling and curbing extravagance among the bank’s employees by enabling them to be able to keep their own budgets. The financial analyst described a budget as a compass and a mirror of how funds will be spent. It is termed as a compass since it directs those who use it into the life of wise spending and as a mirror because it reflects how money ought to be spent. Alternatively, a budget is a tool that provides earners with crucial information that helps them to manage their finances (Brott, 2007, p. 55). It is always better to be aware of potential over-spending than to spend recklessly without being aware. This awareness is what a budget creates. People who spend while keeping their budgets in mind are cautious spenders because the budget prevents them from being extravagant and impulse buyers. In the case of budgeting, a spender is able to attend to most, if not all, the elements that require spending in order of importance. It is clear that many people are well informed of the amount they earn but lack the knowhow of how they spend it. Most people fail to keep their budgets due to such budget blunders as setting impractical goals and giving up too soon on budgets. Some are driven by ego into spending more than reasonable because they are motivated by the urge to maintain a high reputation. The cause of one not living within their own means draws the effect of long term financial hardship. After an internal research on the employees’ financial
William E. David
ENG115- English Composition
Prof. Sandra McDonald March 10, 2015
It has been observed that most of the employees of Bank of America create individual budgets but do not keep a record of them. This is because most of the employees return to the bank for personal loans just two weeks after receiving their salaries. Due to this finding, the factory utilized financial analysts and decided to develop measures of controlling and curbing extravagance among the bank’s employees by enabling them to be able to keep their own budgets. The financial analyst described a budget as a compass and a mirror of how funds will be spent. It is termed as a compass since it directs those who use it into the life of wise spending and as a mirror because it reflects how money ought to be spent. Alternatively, a budget is a tool that provides earners with crucial information that helps them to manage their finances (Brott, 2007, p. 55). It is always better to be aware of potential over-spending than to spend recklessly without being aware. This awareness is what a budget creates. People who spend while keeping their budgets in mind are cautious spenders because the budget prevents them from being extravagant and impulse buyers. In the case of budgeting, a spender is able to attend to most, if not all, the elements that require spending in order of importance. It is clear that many people are well informed of the amount they earn but lack the knowhow of how they spend it. Most people fail to keep their budgets due to such budget blunders as setting impractical goals and giving up too soon on budgets. Some are driven by ego into spending more than reasonable because they are motivated by the urge to maintain a high reputation. The cause of one not living within their own means draws the effect of long term financial hardship. After an internal research on the employees’ financial
References: Brott, R. (2007). Basic Principles for Maximizing Your Cash Flow - 7 Steps to Financial Freedom! United States: ABC Book Pub. Mulonas, D. (2004). I’m not flipping burgers when I’m 70! Edgewater, NJ: New Art Press. The Blokehead. (2004). Minimalist: How To Prepare & Control Your Minimalist Budget In 30 Days. United States: Amazon.