Preview

Personal Budgeting

Good Essays
Open Document
Open Document
777 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Personal Budgeting
In today's here today, gone tomorrow society there are not many people that take the time to create a personal budget. Many feel that they don't really need it; while others just don't want to restrict their spending. With this in mind, it's no wonder that personal bankruptcies are at such an all time high. The advent of credit cards and the wide spread availability of credit itself has allowed people to purchase what they want, when they want, with little to no regard of whether they can really afford it. There is small hope that these patterns of behavior will change in favor of living on a budget until the masses realize all of the advantages of a personal budget.
Living on a budget relieves a great deal of financially related stress. It's always fun to spend money but when the bill comes due, the fun is long gone. A lot of times when this happens people resort to what my grandmother use to call ‘robbing Peter to pay Paul.' In other words, they resort to using one credit card to pay on another card. Other times people choose to get what's called a "payday advance loan." A payday advance loan is given by a credit company for a specific amount that will be automatically taken from your next paycheck. While this will put money in your pocket for the short term, in the end you will still be in the same hole. Either of these situations causes a viscous cycle of debt that can be extremely difficult to recover from. A budget helps to ensure that debt is prevented and money will be available throughout the entire month.
A budget also helps an individual regularly place money into a savings plan by freeing up money that they did not know they had. This allows for a comfortable retirement when that stage of life rolls around. It will also provide a financial cushion to cover any emergency situations that may arise.
Goal achievements are also an advantage of personal budgeting. Everyone has financial goals that they would like to reach in the future. Whether

You May Also Find These Documents Helpful

  • Better Essays

    Jet2 Task 2 Essay Example

    • 1914 Words
    • 8 Pages

    A budget, as defined by Hilton (2009 pg 348), is a detailed plan, expressed in quantitative terms that specifies how resources will be acquired and used during a specific period of time. A budget is a financial document utilized to project future income and expenses. A budget is based on how much you make in income and what your monthly expenses are. Budgets evaluate performances while the plan is what is going to happen or refine what you want to accomplish by thinking ahead. The purpose of having a budget is it improves efficiency, assigns responsibility, provides direction, and helps businesses plans and control finances. Managers use the budget as a benchmark against which to compare the results to of actual operations.…

    • 1914 Words
    • 8 Pages
    Better Essays
  • Good Essays

    Competition Bikes Task 2

    • 1502 Words
    • 7 Pages

    A budget is a plan expressed quantitatively in detail. This detailed plan spells out how the company will acquire resources as well as how the resources will be allocated for a specific time. The budget is used for projecting future income and expenses. The purpose of a budget is the assist the company in providing a methodology in determining what direction to go, to improve efficiency, delegate responsibility and provide a means of controlling the finances of the company. In some cases, managers use budgets to determine how to set targets and standards for employees.…

    • 1502 Words
    • 7 Pages
    Good Essays
  • Satisfactory Essays

    Text Questions 6

    • 317 Words
    • 1 Page

    Budgeting is like being on a diet, Budgets only work if you stick to them, Budgeting takes a lot of time.…

    • 317 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    Unit 2 D3

    • 1009 Words
    • 3 Pages

    A budget is an documented summary of likely income and expenses for a given period. It is important because it helps a business you determine whether they have the money to spend on certain things or not, and if they need to spend more in certain areas. It is created using a spreadsheet, and it provides a concrete, organized, and easily understood breakdown of how much inflows and outflows of money that is going through the business. It’s an helpful tool to help you prioritize your spending and manage your money.…

    • 1009 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Task Supply Task 1

    • 3575 Words
    • 15 Pages

    A budget is a financial plan which is expressed in real numbers, typically in monetary units, which set the expectations for the expenses the company will incur to reach its goals, and management objectives. A good budget uses forecasts to determine what amounts should be used to reach desired efficiency and profitability. Budgets can be used to determine whether a not a process is working effectively, whether or not changes in operations need to be made in order to reach goals, and can help solve problems before they occur and help make changes when necessary.…

    • 3575 Words
    • 15 Pages
    Good Essays
  • Good Essays

    Personal budgets have great aspects. Budgeting allows you to become responsible to prioritize your spending, to make financial goals, managing your debt, save and assess your spending. Many people do not keep personal budget for one reason or another. Without a personal budget you will find yourself with debt not able to pay your bill as usual. The lack of knowledge is not taught on how to budget finances, which can lead into a vicious cycle. So if not prepared for an unexpected emergency could destroy individual or family that is impacted as well as the economy. The negative effects that it could have on one…

    • 621 Words
    • 2 Pages
    Good Essays
  • Good Essays

    unit 6 assessment

    • 2371 Words
    • 9 Pages

    The budget enables people in the organisation to control costs, income and cash and to make confident financial decisions.…

    • 2371 Words
    • 9 Pages
    Good Essays
  • Satisfactory Essays

    creating budgets can help you save your money. Another thing it can help with is setting goals. this goes along with saving and creating budgets so you can afford, for example a car, or a house in the future.…

    • 1088 Words
    • 4 Pages
    Satisfactory Essays
  • Satisfactory Essays

    * Create a budget- creating a budget will help you not spend more money than you have. Creating a budget will also help you stay out of debt.…

    • 870 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

     Why Budget. Do you have a budget? Why or why not? What do you think are the major reasons why people do not make formal budgets?…

    • 525 Words
    • 2 Pages
    Powerful Essays
  • Satisfactory Essays

    I believe that young people should be required to have a budget and stick to it, for many reasons. First of all if a young person is required to have a budget and stick to it they will learn to manage there money so that they can have money to make it through till their next payday.…

    • 457 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Creating a Budget

    • 281 Words
    • 1 Page

    Creating a budget is also known as creating a spending plan. It may not be the most entertaining use of your time, but from personal experience it is a must do for anyone who has an income. Have you ever cashed your paycheck and a few weeks later wondering where all the money went? Budgeting and tracking all of your expenditures will graphically illustrate exactly what you are spending your wealth on.…

    • 281 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    Why to Budget

    • 317 Words
    • 2 Pages

    The article titled, “The Beauty of Budgeting” was written by the staff at Investopedia. It describes how making a personal budget is a great idea when struggling to live within your means. This article is targeting the majority of Americans who do not know how or are unwilling to follow a personal budget. They explain step by step how easy it can be to get your finances in order. They go into depth about starting with looking at your bills and separating fixed and variable costs, then move to showing how you can increase your income or decrease your expenses, and then explain how easy it can be to make keep it balanced on your own.…

    • 317 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Pursuing this further your personal values are the starting point in financial planning and budgeting. Budgeting is a process of projecting, organizing, monitoring, and controlling future income and expenditures. The purpose of budgeting is to reach financial goals. In the goal-setting phase of budgeting, goals must be specific. In particular, they should contain dollar amounts and target dates…

    • 416 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    "The budget process is one aspect of personal financial planning, a tool to make better financial decisions." (Siegel, R., & Yacht, C. (2009)) There are, like there is to everything in life, other financial tools that can help. Such as financial statements, risk assessors, time value of money, micro & macroeconomic…

    • 780 Words
    • 4 Pages
    Good Essays