“My money are mine – how can I manage my budget – basics of finance“

Creating my personal Budget

What is the budget? Reflect shortly about this opinion of John C. Maxwell, „ A budget is telling your money where to go instead of wondering where it went„. We can and  we should understand that it is essential to PLAN BEFORE spending your budget, and is not useful to make only an inventory of the expenditures already made – when is not anymore too much to be done! For a more correct budget, we can start with registering all our spending, but this is not Budgeting! We are properly developing a budget only if we create a proposal for spending in the next future our incomes. The execution of the budget needs re-evaluation, periodically.

Source: https://pixabay.com/photos/search/?cat=business&pagi=2

One can distinguish between a budget for a person, a group of people, a family, a business, a nation etc. and there are three different situation concerning the balance between the expenses and incomes:

• Balanced budget – when the expenses are equal to the incomes;
• Budget with deficit – when the income is lower than the expenses;
• Budgetary surplus – when the incomes are higher than the expenses; In each of these situations an attentive supervision of the expenditure is needed, in order to re-plan some items, to look for extra incomes or to decide properly for the extra incomes.

When considering to create my personal budget, we envisage

• to avoid a budget with deficit, however we need to be prepared also for this undesirable situation, to know what can we do in order to minimize the problems;
• to keep our budget balanced, while rearranging the budget items if certain surplus is identified, for the most relevant objective;

My first budget:

Register as exact as possible all  your incomes and expenses, for the next month:

Insert extra rows for new items! Try to not forget to register all your incomes and expenses.

The list will include fix expenses, having the same amount in each month of the year and variable expenses – with different amounts from month to month, and this category will be important for making various adjustments.

When comparing the the monthly total income and expenses, we can have two situations:

– More income than expenses, means that you have to plan to invest the in your future, you can diminish your debt faster, or simply you save the for unknown needs.

– More expenses than incomes, is the situation when you will check carefully all variable expenses; usually the fix expenses are important and negotiable. You can make corrections on a single item, but is possible also to  cut from many of the variable expenses.

The budget will be revised periodically, but the most important advice is to register attentively each item of income and cost. At the end of a month after a correct inventory, great surprises are possible by observing the huge total of the many small amounts, usually considered negligible.

Do not forget some useful advice, in managing investments in optional / private pension funds, actions, deposits, saving accounts, renting or real estate acquisitions.

In the same time try to avoid the excessive use of the credit card, to avoid to spend compulsively, and do not forget your financial goals!

Can we imagine the world without money?

 Historically, we know that were periods vary far in time, without money, and we are aware of the fact that changes will occur, and various new tools and systems will appear. We need to know them and be prepared to accept the newest and useful changes together with their benefits.