How to Create a Good Budget
credit: fuzzcat
Creating a good home budget is one of the most effective ways to ensure you have some financial security. Having a budget means you won’t spend more than you have, you can plan ahead and you can also make adjustments when unexpected financial events occur. But what are the key features of a good budget? Here are some characteristics of a budget that we think are the most important:
- It should be as accurate as possible. If you’re going to the trouble of creating a budget, go to the trouble of looking up recurring expenses rather than estimating them.
- It should have meaningful categories. At the same time, don’t create so many small categories that your budget becomes an unwieldy monster.
- It should encourage you to record all expenses, including cash ones. It’s easy to lose money through a trickle of cash so make sure that your budget plan involves tracking expenses from all sources, not just what comes and goes through your account by check or transfer.
- It should be realistic and include some real goals. Having a budget is just the start, but it’s really just a means to an end. Think carefully about your financial (and other) goals, and work out how to incorporate them into your budget.
Tags: Budgets & Money Management | Finances | Saving Money
This entry was posted on Monday, June 9th, 2008 at 3:30 am and is filed under Budgets & Money Management. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
