Personal Debt Management
HOUSEHOLD BUDGETING 0
HOUSEHOLD BUDGETING
Traz Ragin
Grantham University
April, 2017 | |||||||||
| OPERATING BUDGET |
|
|
|
| ||||
|
|
| |||||||
|
|
| |||||||
|
|
| |||||||
|
|
| |||||||
|
|
| |||||||
|
|
|
|
|
|
| |||
| STATUS | OPERATING | BUDGET | ACTUAL | DIFFERENCE ($) | DIFFERENCE (%) | |||
| ATM Cash Withdrawals | $0.00 | $300.00 | -$300.00 | |||||
|
| Auto Expenses | $0.00 | $4.00 | -$4.00 | ||||
|
| Clothing | $0.00 | $32.00 | -$32.00 | ||||
| ## | Electronics | $100.00 | $243.00 | -$143.00 | -143% | |||
| ## | Gas | $160.00 | $173.00 | -$13.00 | -8% | |||
| ## | Groceries | $20.00 | $23.00 | -$3.00 | -15% | |||
| ## | Restaurants | $280.00 | $154.00 | $126.00 | 45% | |||
|
| Bank Fees | $0.00 | $76.00 | -$76.00 | ||||
| ## | Online Services | $17.00 | $17.00 | $0.00 | 0% | |||
| ## | Rent | $400.00 | $400.00 | $0.00 | 0% | |||
| ## | Phone Service | $49.00 | $49.00 | $0.00 | 0% |
Were you surprised by anything when you created the budget? Do you think you will use it and follow it?
I was surprised to see that most of my spending will be going to electronics. The least amount of money that I was spending was on groceries. This was funny or rather ironical because the essential commodities that require a lot of spending I do not spend a lot on them.
I further discovered that the budget was not realistic in its own sense because certain commodities were placed on the budget they were unnecessary. This is because with an income of $1434 and a total expenditure that amounts to $ 1045. It does not sound realistic since the expenditure seems to be overwhelming the income.
There is no money set aside as contingency, for any effective budget there needs to have a contingency fund set aside. This is done so as to ensure that the cost of any emergency situation that may arise will be effectively dealt with. There are spending that are considered to be white elephant projects. This are projects that do not necessarily have any impact or they are rather not necessary to the present situation. For instance, expenses such as restaurants do not have any importance or rather they may not necessary (Henry, 2015). The need to have a budget that is friendly there needs to be provisions that will ensure that there is amount set aside for savings.
How might a career change (Computer Systems Analysis field or any relatable I.T. Field) and further education affect your budget?
With continuous exposure to various careers and education one will be able to come up with a budget that will be able to respond to the current situation or rather the needs that are present. The effect that higher education has to one is that on focuses on the essential things before settling for luxury materials. An educated person will not only come up with a budget that is realist but a budget that has balance of situations. For instance, where there is an inflation in the economy, an educated person will make necessary adjustments that will enable the person to come up with a budget that will fit the current situation.
Education therefore gives one insight of creativity in coming up with a budget, this is because one is not making a budget with assumptions but rather with facts and basis. An educated person will ensure that they save enough from their salary so that they can be able to do or rather carry out personal investments.
For instance, a person who has a career in business will focus on the most essential things that they need, this is from the opportunity cost analysis. This is where the person making a budget will settle to the next best alternative forgone (Miller, 2014). This will try as much as possible not to overwhelm the income earned by the person coming up with the budget.
In conclusion when coming up with a budget there is need to have a focus on the needs of the person making the budget and the available resources. This will ensure that the person does not under budget or over budget.
Reference
Henry, P. (2015). Effective Budgeting. Harvard Business Journal.
Miller, D. (2014). Finance Managment. New York: Pearson INC.