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The projects of your organization will make or break its future. You will have to adopt rigorous and thorough strategies that will help you to utilize your costs with the ideal and finest use of the organization’s resources. These resources include personnel, time, materials and equipment. Not only that, but you will also have to work around how to make decisions about projects, how to use the data to calculate the risks involved in these projects, and measure the financial performance of the organization.

Strategies to Follow when Designing and Tracking an Internal Cost on a Budget

  • Resource Planning

When planning on undergoing a new project, the first stage is to make a breakdown of what resources are planned to be used. This stage is an important stage as it provides the basis on which the tracking of the internal cost is made upon. 

  • Cost Estimating

The cost is decided based upon the project’s resources that are required for the successful completion of the whole project. Managers determine the budget of all of the required resources and create an estimate of the internal cost of the whole project. Cost estimating is important to predict or calculate what the anticipated total cost will come to be of completing the project. This is a constant process that involves a selection of estimating methods and techniques in tracking the internal costs that would most likely occur for the completion of the project

The methods and techniques differ from project to project. It can also be that companies need to use their expert judgment or historical experience to determine their internal costs. The accuracy of these methods and techniques are sometimes put into question. It is advised that the accuracy of the methods and techniques must be spot on during the initial stages of the project’s internal cost planning. As the project continues to become clear and well-defined, updated and revised estimates can be performed. 

  • Cost Budgeting

Once the estimate of the internal costs of the project has been decided, you can send it further to be finalized and approved for the project’s budget. The budget is authorized according to the cost estimate of the internal costs of the project. The finances and funds are then requested, authorized, and received for the project.

  • Cost Control

The exercise of measuring the project’s cost performance per the cost baseline is called cost control. The project must follow the laid out effective cost control requirements that were highlighted in the project’s plan. If there are any cost variations found, the management investigates the cause of it. If they are considered to be improper and avoidable, counteractive actions are likely to be taken. Costs can be controlled and tracked throughout the process of the project’s phases. This way, the company can avoid any variations of cost overruns and shape firm financial controls to the project. It is also easier to make cost-related decisions throughout the duration of the project’s life cycle.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Happy newlywed couple with a piggybank and money bundles isolated on white background
Marriage opens up the doors to a new life. Sure, maybe money and finances aren’t the most romantic topics you want to bring to the dinner table.  However, it shouldn’t be avoided. Let’s be honest. One of life’s biggest expenses is a wedding which bounds a couple together and lifelong commitments are made.

Couples who trust their spouses or partners with money matters typically feel more secure and financially content with gratitude. On the contrary, issues and arguments about money matters harms many relationships. In fact, most couples fight about finances twice as much as they quarrel about their sex life. Issues related to money is the leading cause of stress in relationships. Almost 60% of divorces were finalized due to financial arguments between couples, hence, making financial arguments the primary indicator of divorces. In the long run, it’s better to plan ahead and put your heads together when it comes to money and finances.

1. Be Clear About Your Assets and Liabilities

Couples should opt for bookkeeping their assets and liabilities and controlling their expenditures as soon as they plan to marry each other. The beautiful journey of love and romance thereby puts you in a new financial life. Therefore, it’s obligatory to be aware of the upcoming financial dilemma in your life. The complications of possessions, properties and debts can brutally damage a relationship. So, be clear about all sources of income and earnings, spending habits, financial goals, and budgets with each other. Being honest about finances enhances a couple’s trust. Clarification of such finances also prevents a great deal of shame and fear in the future.

2. Share Your Family History

In many ways, your family background and upbringing demonstrates how you will handle your new financial life upon marriage. Therefore, couples should discuss their family history of finances beforehand; how they spend their allowances, the money etiquette they have learned from their parents, their budgeting priorities and spending habits. The more you know about each other and your preferences, the better understanding you will have regarding personal and financial matters that ultimately help strengthen the trust among one another.

3. Joint vs Separate Accounts

Some couples prefer having open, joint accounts and pooling all of their earnings into that account, while others prefer to keep their income discrete. However, it’s better if couples set up a joint account for shared expenses such as groceries, utilities, house rent or home mortgage payments, and children’s education. And, if you prefer, you can keep the extra money separate for your own expenditures or saving purposes. Again, the more open and honest you are, the more successful your relationship will be.

4. Be Flexible in Sharing Expenses

When it comes to sharing family expenses, a couple has to be flexible with their new financial life and onward. This is because one spouse may be earning much lower than the other and, by distributing equal expenses, you will be seen as equals in the relationship. Financial stress can spoil a relationship. It’s best if it’s a shared burden rather than one person struggling to get by.

5. Sensible Sharing of Expenses Via Joint Account

When one spouse has a habit of overspending money on frivolous purchases, it can cause conflict in your new life together. To ease such tension in a marriage, decide on a monthly figure that each partner can spend freely at their own discretion, without being questioned about the expenses. Simply agree to consult each other on significant transactions in order to avoid further stress. For such a case, $154 is an ideal amount that most couples agree upon to spend without informing one another.  Anything over that amount should be discussed before purchasing.

6. Take An Early Look At Each Other’s Taxes

When a couple has similar earnings, one might owe more tax in comparison to the other at the start of  their marriage. The opposite can happen when one earns much lower than the other. Therefore, sort out tax issues and update your W-2 withholding forms as soon as possible.  

7. Pay Off Debt Together

Although your new financial life comes with more responsibility, one cannot automatically owe their spouse’s debt right from the start of their marriage. Even then, what he or she owes will still affect your family budget and life choices. Therefore, aim to tackle such debt together simply as a team and make reducing debt your first priority. In the case that there are multiple loans, begin with the obligation carrying the highest interest rate first in order to reduce the overall interest you both pay.

8. Team Up To Save

It is much less expensive to maintain household finances as a couple rather than living separately. Paying less on rent or mortgage is just one of many smart ways a couple can opt for saving more. Car insurers, home mortgage companies, and facilities like gyms and clubs usually offer better deals at reasonable costs when you sign up together. In addition, there is no need to have multiple Amazon or Netflix accounts when you have already started your new financial life, the first chapter of your marriage.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Real estate mortgage concept with small plastic house models on top of stacked coins.
The most important stages for effective household finances will be discussed under this topic. All of the following steps should be valued, evaluated, and addressed before formulating an effective household finance strategy. Important decisions should be taken after careful evaluation.

Step 1: Protection Management

It is one of the most significant steps of family financial management. A household financial plan/strategy must deal with protection management. The purpose of this safeguard management protects against unforeseen financial loss and accidents. Protection management has four considerable fundamentals.

Step 2: Life Insurance

Life insurance is a crucial protection management step. A life insurance plan should be taken as early as possible. For a healthier and younger individual, it will expense less. This plan will provide financial safety to the family if the guardian of the family dies.

Step 3: Emergency Savings Account

An emergency savings account is essential for protection management. Life is much unexpected and any type of unforeseen incident can happen anytime. An emergency fund or savings account must be maintained to prepare for these unplanned emergencies. If you don’t have any such account, then you have to borrow money from a bank or other people. This situation drags you into debt. To avoid debts, sufficient funds must be saved in an emergency fund.

Step 4: Legal Protection

Legal protection protects against accidents, agreements, lawsuits, and contracts. Wealthier individuals are more prone to legal issues. They need a lawyer to take legal advice from. Legal protection a must included part of any household financial strategy.

Step 5: Long-Term Care Insurance

People often work hard in life. They spend their lives securing their future with savings to be used after retirement. However, in the case they get a severe illness, all their savings may be utilized in one go with nothing left to spend on other household expenses and utilities.  Long-term care insurance provides protection against such a financial crisis. This protects your assets which you have worked hard to earn over your lifetime.

Step 6: Debt Management

This is the next most vital step to be inserted into a household strategy to make it effective. The purpose of this plan is to make you debt free and enjoy financial freedom. Most people assume debt as a reality and necessity of life but this is not good practice. Your target must be to eliminate debt from your life. Debt makes goals and dreams almost impossible to achieve. Every time you plan to improve your financial position, debt comes in the way as one of the biggest and toughest hurdles.

Making a strategy to remove debts must be effective in prioritizing management household finances.

Step 7: Savings Management

The purpose of Savings Management is to identify and recognize the financial challenges of future targets, to tolerate education expenses and retirement plans, and to create saving strategies to protect plans. Make a clear understanding of expected finances, i.e. education expenses, wedding expenses, retirement expenses, etc and then start a savings plan accordingly.

Savings management is a necessity for managing household finances effectively.

Step 8: Income Management

Income Management must be included in your household finance strategy or plan. The purpose of Income Management is to manage capital. If you don’t take control of your money, money will otherwise control you. Focus on cash flow management; understand where your cash is going. Spend money where it is required in reality. By controlling your money flow, you can manage your financial plan effectively and can improve the standard of your livelihood.

Conclusion  

By understanding and managing these steps, household finances can be managed effectively. This will impact the quantity of menace you are prone, the level to which you can get the benefit of opening, and the achievement of any economic liberty map that you may produce.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Coins in glass jar for money saving financial concept

What Is Life Planning In Terms of Savings?

Having a strong financial threshold is absolutely necessary for prospering. The fact of life is that money matters. It keeps you going and enables you to protect yourself and your family from unforeseen circumstances or expenses. Saving money has its own strategic importance in life. Obviously, everyone wants to become financially secure and more stable in life. That’s why people tend to save money for numerous reasons which include; to become financially independent, to attend to emergencies and unforeseen expenses, to get out of debt, to increase their bank balance for investments and reserves, to save money for buying home, car, travel, education, retirement etc.

What Happens Without Planning Finances?

‘How much money do we need to save’ is probably the most discussed topic in peers, families, schools, colleges, and social gatherings. We need to learn the art of saving money for hard times or else we will probably get stuck miserably in severe financial crises. It becomes extremely challenging to recover from a serious financial crisis as your entire financial equation disrupts. One thing to be noticed is that not everyone is privileged enough to procure a regular paycheck. In fact, most people find it very difficult to make their ends meet or save money for hard times.

Always Save

In order to meet daily necessities, some people can budget their paychecks extremely well and they always manage to save a tiny portion of income for savings for hard times. Others face extreme level difficulties in maintaining a healthy financial life cycle, predominantly due to irregularities in monthly paychecks. Careful planning and budgeting are critically important for keeping a balance between your income and expenditures. Without creating a budgeting mechanism, you can never expect to save money—no matter how hard you may try.

Consistent Support via Financial Planning

According to the 50/30/20 rule, you must put at least 20% of your income into your saving account. By keeping 20% income as reserves, you will probably get stress-free from money-related concerns. It is absolutely necessary for people that do not have regular paychecks to make a finance budget in order to keep an eye on their income and spending schedules. There are hundreds of professions such as consultation, designing, freelancing, and commission based sales agents working for different organizations that don’t promise a regular paycheck. For such people, following guidelines can help them to save money.

Know Your Baseline

Your baseline includes bare essentials, without which you can’t live. When you don’t have a regular paycheck, you must keep a proper record of all transactions and examine your spending patterns. Your income may be unstable, but expenditures on different commodities or services are generally stable, predictable and repeatable. It includes major expenses, listed below.

Groceries: An effective budget can help you save a lot of money. Food is a category where costs can be cut significantly. Plan on buying those products that are absolutely necessary for you to consume for the month. Quite understandably, maintaining a healthy financial flow without a regular paycheck is hard, which even restricts you buying items of your own choice.

Housing and Utilities: Obviously you need to pay your monthly utility bills, rent or mortgage payments—which can’t be ignored. The costs that are incurred on house maintenance creates a major problem for you to maintain a sound financial life cycle. When you have budget issues, you can postpone them or manage to fix things yourself.

Medical: If you don’t have medical insurance, then heavy expenses on medical treatments can cost you losing each and every penny in your savings. According to a study, it is perhaps the number one reason why people go bankrupt. This indicates that life without a regular paycheck is seriously hard.

Transportation: To save money for hard times, you can use public transport instead of buying or managing a car. Going to work in your own car may be considered stress-free but looking at the cost and benefit analysis, it should be avoided.

Set Your Income Target

Everybody can roughly predict how much they can earn in a single month. The expectation should be kept high and income targets must be set so that you can get a clear picture of how much more money you need to earn to maintain a balance in your emergency fund savings. However, there is no guarantee, whether you will be able to meet your income target—all that you can do is predict it and work hard to earn it.

Open Multiple Savings Accounts

Opening multiple savings accounts is a secret tactic used to save money without a regular paycheck. The income that you earn from different sources can be smartly allocated into multiple savings accounts. A tiny portion of your income that you credit in those accounts in prosperous times will surely help you out in rough financial times.

Conclusion

Having a regular paycheck doesn’t necessarily guarantee financial safety and security. With irregular paychecks, you can still afford to save money for hard times.  For saving money, it is your will and motivation that matters, not just the regular flow of monthly paychecks.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

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Various management tools are used by businesses to ensure that their business functions run smoothly. These tools are quite efficient in doing what they are supposed to do and offer business owners key insights into their financial information and business processes. Budgets are one of the most common financial tools that are used by businesses to manage their finances. A budget is created with advanced forecasting tools and is useful in predicting your future expenses. Companies heavily rely on the accuracy of their budget because most of their key decisions are based on it. There are all sorts of budgets, including departmental and company budgets.

Performance reports, on the other hand, are generally an assessment of a specific function of a business. However, an overall performance report is also generated at the end of every fiscal tenure. These reports, along with budgets, are extremely critical to every business. Highly professional people should be appointed to work on them, including professional bookkeepers or accountants. The finance department is usually allotted the task of creating a budget, while a performance report may highlight specific attributes associated with the budget and should be created by an expert.

Performance Reports and Budgets Help Plan for Expenditures

Your current budget is an important indicator of how you should plan your future budget. Based on previous experience, business managers can indicate overspending as well as allocate the proper funds to specific departments. The growth of your business depends on your ability to allocate your budget correctly and efficiently.

A budget also helps you determine the number of sales that are required to meet a specific target. You can then allocate your sales resources accordingly so that the target can be achieved. Reviewing the budget and adjacent performance reports helps businesses understand the specific elements in their mode of operation.

Tracking Spending Variances

Tracking a company’s spending is an important aspect of any business. If you do not regulate and control spending, you will soon lose control of your cash flows and negative balances will start popping up. Small things matter, therefore, the expenses need to be checked. A budget can highlight important aspects of your spending. If your expenditures are not resulting in the estimated amount of sales, it is highly likely that your money is not being fully utilized. Performance reports and budgets help you identify these cases of spending variances which are responsible for under utilization of your resources. Therefore, their roles are vital for a business to achieve it’s fullest potential.

Performance Reports

Though a budget holds a significant amount of key information, it cannot offer you additional information related to budget variances. This information doesn’t necessarily have to be financial and can go outside the realm of budgets. Additional costs of acquiring the resources or poor economic conditions are various factors that need to be considered before a budget is approved. Government changes of laws and regulations related to your specific business are something that can impact your budget and information regarding that is included in performance reports. Some of these indicators are financial while others may completely depend on something else. Therefore, a performance report has to be provided to ensure that there are no surprises in the future.

Suggestions

It is suggested that businesses use accounting tools and software for the creation of budgets as they offer a broader picture of your company’s financials. You can view the information in graphs, plots and any other medium of choice which makes it easier to understand. Maintain accurate records from the beginning and uphold them throughout the bookkeeping periods so you do not have to rush at the end. The process is also quick and efficient, therefore, it will save you precious time and resources. You can also hire professional accounting and bookkeeping services that will make highly accurate performance reports and budgets. If you are in doubt or your accounting skills aren’t spot on, always opt for that option.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Household expenses concept. Blue toned background

What Is A Household Budget?

A household or home budget is a finance plan that reveals the snapshot of your monthly income towards expenses, saving, debt repayment. It allows you to keep a close look at your income and help you examine where you can save money or cut extra expenses. Without a home budget, it’s like sailing a ship in an open sea, moving uncontrollably without a direction. In simplest terms, a home budget is a tool used for sustaining a stable lifestyle.

Significance of a Household Budget

Planning and creating a household budget is no easy feat. It requires persistence and dedication as it may take a lot of time, mental efforts and energy. No matter how well off you consider yourself to be, it is absolutely necessary to have a home budget in place in order to keep a track record of monthly spending. No one is born with money management skills, you have to learn the art of this game before you can start building own budget.

According to studies, a home budget works as a magic formula that solves most of your money related problems. This signifies that we can save tons of money by making an effective use of scarce resources we have for the month. Trust me, a household budget solves more than half of the problems in homes! We often find ourselves stuck miserably fighting with our own thoughts about how on earth we are going to meet our demands for the month with a single paycheck. This concern haunts most of the people around the globe and, if you consider yourself to be among those people, you have to learn money management strategies and skills in order to maintain a healthy financial life cycle.

6 Steps to Build a Household Budget

Know Your Income and Set Goals

The first and the most crucial step in creating a budget is knowing the exact influx of your income. Obviously, whatever you earn for the month has to be wisely allocated into several subcategories like food, health, transportation, utility, clothing, home maintenance and other miscellaneous expenses. So, after keeping let’s say 20% as a reserve for hard times, you need to distribute resources per set requirements.

This means that you need to identify what is important to you and draw a clear line between your needs and desires. Moreover, setting smart goals can help you maintain an equilibrium between your income and expenditures for the month which would ultimately increase your savings!

Stick to Your Goals

Your spending should never exceed your household budget! For maintaining a healthy financial life cycle, you need to plan a budget that remains within the allocated amount of money. There is certainly no point in making a budget plan if you don’t expect to support and stick with it later on. Your positive attitude and conviction will allow you to reap rewards and negative ones will lead you to trouble.

Separate Needs and Wants

Once you start to track where your income or finances are going, ,you will be able to discover which things you can afford to buy and which you can afford to postpone. By closely examining the household budget, you will get a clear picture of your monthly spending and will be able to make a separate list of your wants and needs.

Design Your Budget

People have mixed opinions regarding how to design a budget because everyone has their own set of priorities. They also feel deprived when they have to deal with the word ‘budget’ as it evokes feelings of fear, anxiety, stress or frustration. So, before building your own budget for the month, you need to know exactly how much money you can afford to spend in a month.

Make a Clear Execution Strategy

Once you set your priorities, you need to allocate money and decide how much money you can afford to spend for a certain need. Planning plays a critical role in defining the fate of the household budget. The better it is, the greater the rewards. So, once the plan is drafted, you need to put it into action for making an optimal use of resources at your disposal.

Reevaluate the Budget

Any good household budget plan involves monitoring, tracking, periodic review and occasional re-evaluation. If you continue a habit of making effective budget plans, there will come a time when drafting a budget will become easier than you can ever imagine.

Conclusion

A household budget can help you feel more in control of your finances. It will reveal whether or not you are exceeding your budget limits. A careful plan and a smart approach can help you save more money than you can imagine.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Close-up white piggy bank and US dollars. Isolated on white background
If you expect to save money: Record your expenses, keep track of your financial transactions, change spending habits, make a budget plan, avoid unnecessary shopping, use discounts and coupons…

There is no hidden secret to getting rich. The theory is quite simple; spend less, earn/save more, and invest wisely! But, practically speaking, it is harder than it sounds. Spending less and saving more is no easy feat. You have to cut your extras in order to have a financially secure and stable life. It is true that most individuals and families kick-start their New Year with an aim to save more and spend less, but they usually end up saving no money at all. The reason why they fail to manage their money-related tasks is that they don’t plan and budget their monthly paychecks properly.

Proper Planning and Financial Budgeting

How to save money is probably one of the most asked questions. To which, people have predicted answers like budget your paychecks, spend less, save more, plan wisely, etc. But, little do they know, saving money is much more than all of this and has its own strategic significance in the financial world. There are several ways by which we can save money and accumulate a significant wealth for hard times. With an intention to save money, you can make things work in your favor and save a lot for your rainy days.

Set Your Priorities Right

Setting realistic goals and making an effective money-saving plan requires a brilliant amount of willpower and a promising start to save money. However, it is not an impossible job since there are many ways in which you can save and spend less. The major driving force that triggers you to save something for hard times is an unpredictable future and uncertain medical and personal conditions.

No Matter What—Save More And Spend Less

Budgeting your paycheck is the safest way that you can save the most out of your monthly salary. In order to achieve your goals of spending less and saving more, you have to make a comprehensive plan by looking at both present and futuristic needs. You can only do this once you know the exact status of your financial equation and how much you can afford to spend in a single month. Making a concrete plan may take a little while before you can implement it properly but, once you find a perfect balance in managing your money, you can save a lot for yourself.

Saving money for meeting financial insecurities is critically important for securing the future of your family. Here’re how you can save more and spend less.

Record Your Expenses

The first step to saving money is knowing how much you can afford to spend in a single month and how much you need to save and contribute to your savings or retirement account. So, prior to making a monthly budget plan, you need to record and track your monthly financial transactions—everything from bills to buying coffee or snacks. You must have a clear picture of where your money is coming from and where your money is going. Once you know the exact status of your spending, it will be relatively easier to sketch up a rough plan for the entire month.

Make a Budget

Making a budget plan is one of hardest parts. However, this doesn’t have to be tough , especially when you get a clear picture of your monthly expenses. It’s been said that ‘making a budget plan is hard and following it strictly is even harder.’ Moreover, a budget plan serves as a blueprint for the entire month that restricts you from buying unnecessary stuff. Proper budgeting and bookkeeping help you a lot to initiate a plan to save money that surely leads you to save and spend less.

Stop Unnecessary Shopping

Cutting your extras, especially in grocery items, will help you save a lot of money. Whatever you save for the month increases your savings account balance and that is surprisingly awesome for you and family. This indicates that the more you save, the more stable and secure your life will be! In order to save and spend less, you have to be very careful and choosy in selecting the right items from the shelves or you may find it extremely difficult to save anything for the month.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Book and Coin in glass jar on wooden table with pencil. Conceptual saving, invest, for education or future
When you have no idea of where your money goes, your financial situation can become chaotic, making you lose control over your finances. On the other hand, when you are aware of your complete monetary flow, spending, saving habits, and financial goals, you tend to make smart decisions with your money, improving your overall financial health and outlook. You have to create a budget to help you do just that.

‘Budget your money!’ This is the powerful mantra that every money advisor and bookkeeping expert suggests to their clients. In fact, budgeting is the most fundamental and effective tool for managing your finances. It clearly demonstrates your fund allocation patterns and the choices you have on what items to enjoy. It will liberate you from overloading debts and the grief of overspending. Although, creating a budget is verily more work, it pays off immensely with many great life-enhancing advantages.  Here are the reasons why it is essential that you create a personal budget.

Keep your Eye on the Prize

Budgeting helps you map out your long-term financial goals and work towards them. On the contrary, drifting aimlessly through life and spending your money on every shiny, attractive item that simply catches your eye can hardly help you save up enough funds to pay off your debts, buy your dream car, put a down payment on your home, or go on vacation with your family.

When you create a budget, you tend to follow the path leading towards your goals, save money smartly, track your financial progress, and realize your dreams. You won’t feel misery over realizing that the brand new Xbox game does not fit your budget as you are saving up for a new home (or something else) which is another long-lasting attraction.  

Gain Control Over your Finances

Create a budget for yourself if you want to become intentional about your spending and savings. Consequently, budgeting enables you to control your money rather than let it control you. It prevents the sudden hassle of having to adjust to a lack of money which occurs when you initially fail to plan your spending. In addition, budgeting also helps you decide whether you should sacrifice short-term spending, such as purchasing cheaper hair products, in return for a long-term advantage such as a new laptop or car.

Spend Money within your Means

Credit cards are often the leading reason for most consumers who spend money beyond their means and do not most often realize they are overspending until they are drowning in heavy debt. However, when you create a budget and stick to it, you will never see yourself struggling in such a precarious position. In fact, you will know your exact earnings and affordability to spend every month and how much you have to save to realize your money goals.

Stay Focused on your Financial Goals

In the business environment, budgeting and bookkeeping can help avoid spending unnecessarily on products and services that typically do not aid in attaining financial goals. When you are juggling with limited resources, create a budget to easily make ends meet.

Be Prepared for Emergencies

You never know when life will strike you with unexpected events such as getting laid off, becoming sick or injured, a loved one’s death, or getting through a divorce. All of these can result in serious financial disasters. Evidently, such emergencies often seem to arise in the worst possible circumstances when you are already in need for money. That is exactly why you have to build an emergency fund.

Consequently, create a budget that includes an emergency fund consisting of a minimum of four to seven months worth of living costs. This extra fund will tend to save you from drowning into the depths of chronic debt upon a severe life crisis. Certainly, you have to show patience and perseverance to save up such an emergency fund. However, avoid allocating the majority of earnings into your emergency fund. Rather, device it into budgeting with realistic goals and begin small. Simply putting $10-$30 aside weekly will slowly build your emergency fund.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.


 

Sad man looking at his wallet with money dollar banknotes flying out away
Do your finances seem to continually be out of your control? Are you spending too much money on credit cards? Do you struggle in keeping a balance between your spending and savings? If any one or more of these circumstances describe your financial situation, maintaining a budget in place may support you. In fact, creating a solid budget and sticking to it are the very first steps leading to your financial freedom.

Although budgets tend to be great in action, they are hard in theory. Not sure how or where to start budgeting? Whether you have not managed to create a budget plan or are simply facing trouble sticking to your budget, here is your easy, yet effective, step-by-step guide to help you build a budget you can effortlessly follow.

1. Begin with Big Goals

The first thing you must know is that successful budgeting is not centered around what you are sacrificing; rather it focuses on your goals. Thus, make it clear in your mind: WHY you are making a budget. Do you want to get rid of your debts as soon as possible? Are you planning to pay cash to get a vehicle? Do you aim to purchase a home? Do you wish to retire early to travel around the globe? In essence, focus on your big goals as it is the very secret to getting everything you want to achieve.

2. Track your Spending

Before creating a budget plan, you must understand how much you spend every month on various items. And, to determine this you have to identify your budget baseline simply by tracking your spending for the past few months. Thus, go through your recent bank statements, last six months or more, and figure out how much goes towards utilities, food and groceries, mortgage or rent, transportation, shopping, etc. This process will also enable you to identify areas where you often overspend. Consequently, you become more aware of your spending and saving patterns, helping you make better financial decisions.

3. Make the Most of Technology

Technology has made things far easier than most people really know. If you have never made a budget before, are not sure where to begin your budgeting, or simply get frustrated with complex details, using a smartphone app is a good idea. In fact, there are many great budgeting, bookkeeping and finance apps that can connect with your bank accounts and set up a complete budget over a time by using the data from your spending habits.  

4. Give Each of your Dollars a Purpose

When you begin budgeting your each and ever dollar, you are eventually planning for unexpected situations such as spending on a sporadic cup of coffee with your friend. This will also help you put your extra money towards either savings or an emergency fund.  Give your money purpose, down to your every last penny.

5. Set Goals

Your financial goals can wipe the pain out of saving money. The more specific goals you have, the more motivated and excited you are to save money and the more you are inclined to stick to your goals and, thus, budgeting. Your great goals could be saving for a dream vacation with your family or a down payment on a new home.

6. Allow Yourself Some Fun

Besides focusing on your basic needs and financial goals, make a thin line for a little fun as well. If your budgeting plan makes your life boring, you are less likely to go along with it. On the contrary, you will love sticking with a plan that keeps you happy. A few fun categories in your budgeting may include eating out on weekends and saving for winter holidays.

7. Use Cash

It is often easier to overspend, thus, save less when you are using credit or debit cards. Therefore, take out adequate cash on your payday for the budget categories that make sense and tell yourself ‘I cannot get more money, even when I run out.’ Hence, you are done with spending right away when your cash is gone! And, this is simply one of the easiest ways to keep yourself accountable.

8. Automate your Savings

Try transferring part of your paycheck into your savings account as soon as you receive it. This way, you will help minimize your spending and improve your savings. Also, leverage auto withdrawals in order to save for expensive transactions like a vacation or new furniture.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 


Budget Finance Business Cash Flow Concept
A budget can be a challenge for new and small business owners. It
is the critical part of any business, whether small or large. In the budget, plans on how much will be spent on each business operation, when to spend, and when to save are all laid out meticulously. New small business owners often make a few crucial mistakes while budgeting due to lack of experience. These mistakes can be avoided by research and taking advice.  Most importantly, when there is a budgeting mistake, it must be properly corrected.

It is important to identify all expenses, whether small or large, and insert them into the budget. If you fail to make an actual estimate of all expenses, you may be left with no money at the end of the month to pay for debts and other expenses.

Mistake #1- No Business Plan or Strategy

New small business owners often don’t have past experience with precise budgeting and running a business. They often make the budget without a strategy and solid business plan. Small and long-term financial plans are the crucial part of a budget. Frequently, new small business owners are just so excited to jump into their start-up without a detailed business plan and goals.  If you want success, you must plan for it.

Mistake #2-  Selling at Low Prices

Once a new small business owner enters the market, they are often enticed to sell their product or service at a price less than that of their competitors. This strategy is adopted to attract customers and it makes sense. But in theory, you are losing your money. Remember, Less is the profit margin, more is the loss. To compensate this loss, sometimes they decrease the operating expenses for producing the low quality product. But, remember, that the customer is not likely to purchase it if it is of poor quality. Again, you are in loss.

Under-pricing cannot be a solution to enhance sales.

Mistake #3- Spending More than the Projected Budget

The initial few years of start-ups are very crucial for business success. The mistake often seen is that new small business owners start spending excessively as soon as revenues start receiving. The most common budgeting mistake is that they overspend on advertising. A common assumption about advertising is that it will immediately enhance sales. In fact, at least a quarter is needed to see the impact of advertising on sales. Overestimation of revenue leads to a glaring budget deficit.

When we are not tracking our expenditures by bookkeeping or any accounting software, our budget is not healthy. When we do not identify what we have spent, we cannot make out when we have reached our limit. Once we track our spending, we can actually start following our budget as planned.

Mistake #4- Underestimating Uncle Sam

Every business has to pay a heavy amount to the government in the form of taxes. There’s no getting around that one. If you underestimate the amount of taxes you are liable to pay, it will affect drastically affect your budget.

When making your budget, sit with your last year’s bookkeeping record to know the details of all transactions. Your bookkeeper will tell you the exact amount of taxes you paid last year. Keeping this data in mine, estimate the exact amount of taxes you will owe for this year.

Many business owners often underestimate taxes which leads to budget failure. Overestimation of taxes is much better than underestimation.

Mistake #5: Loss of Revenue Due to Mismanagement

A small business owner has a busy schedule, no doubt. They have a long list of things they need to accomplish each day. Unfortunately, many fail to manage and organize their business cycle at an optimum level. This disorganization can lead to extra expenses and less profit margin.

Your cash flow is an indicator of a healthy business. If your cash flow is poor and you have many pending payments, then it should be taken into consideration. Poor cash flow indicates that money coming in the form of payments and profits is less than the amount of money going out. Money going out is in the form of items such as operating costs, marketing, and advertising campaigns.

Conclusion

Budgeting mistakes can be avoided by following the above-mentioned plans. A proper budget is a key to business success and the key to a solid budget is proper planning.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.