This article is a result of my long time research to identify the secrets behind creating perfect personal budget. In my study, I found 5 points to follow to make a budget perfect. Here are those points I am sharing for you. There are lots of other factors involved to the creation of successful personal budgeting, but I have collected these 5 points among them, from the real world and personal experiences.
Personal budgeting is not a single hour or day process. Time is the major element helps people to identify all necessary requirements. I will explain these are in detail.
Initial Preparation for Identifying Income and Expenses
Personal budgeting means, getting an idea and control over the inflow and out flow of our money. For a person, it is necessary to identify his monthly inflow’s and outflow’s to support personal budget creation to a great extend. You can do it but, remember, inflow’s and outflow’s always vary in each month. For example, if a person following my previous featured active-active-passive income generation methods, his present month net income may be 1000 bucks and next month it may 950 bucks and third month it will go up to 1100 bucks. If a person planning his budget, as per the information from present month, his budget fails certainly in the next month because of changes in the income. To solve this issues and identify right income and expenses, an individual required to track his income and expenses for at least 4 months to get a real average about his monthly income and expenses. With the help of writing down each and every income and expenses for few months, he can easily analyze the result to identify possible variations to reach with an exact average total from both income and expenses.
Requirement of Written PlanIf you search a little, you will be able to find lots of personal budgeting tricks and tips and step by step guides in the net. Most of them deals on how to create and manage personal budgets, but rarely on the pre-planning side. If you read any article, may noted the requirement of recording each expenses and income by writing down. The idea behind such advice is nothing but, to ensure a person not missing any monthly regular and rare expenses/income. If do such, it will help you to not miss any factor that supporting income or expense finally.
Once an individual comfort with above two parts, it is the time to plan an implementation. If you are in the scenario, will you implement it at the next moment? You can say ‘yes’ but I say ‘no’. The reason behind this answer is simple. Anything should be tested before implementing them as permanently. So, it is better to test the plan against yourself first, prior to applying the same to your entire family. If a person not identify his own income and expenses, how could he able to plan budgeting for entire family? So test it first against you and confirm it is a working fine.
Identification of Implementation Difficulties
Finally, we are in the total implementation stage. Only point to remember at this stage is, a budget should not kill the happiness of any family members or it should not prevent a facility that any one from your family enjoying for long term as a part of their life. You can put controls on any activities but, preventing the long going facilities will be dangerous to your budgeting in some another way. Apply the budgeting for a period of one month and rectify any possible issues. Continue this practice for at least next 4 to 5 months, until able to clear all the burdens and difficulties and come it as a practice for you and family members. Your budget is in place now!
Monitoring Success and Failure Measurements
Of course, you need to monitor your budgeting on time to time to know the level of success you are achieving and to know whether it is meeting all your pre-set financial goals. Monitoring will help you to identify any bottlenecks that preventing from achieving your goals or understand any difficulties, as I have mentioned with previous points. Resolution should be done immediately upon identifying any errors, bottlenecks, planning mistakes to prevent such from affecting to your personal budget.You are welcome with suggestions and comments.