Budgeting Series
Why is Budgeting Important?
Why are budgets important?
Whether it is personal, corporate, or government finance, everything requires planning to realize short-term or long-term goals. Anticipating incomes and expenses helps track finances and prevent overspending and used up emergency funds.
Benefits of budgeting
It helps you focus on your financial goals: Planning for the future and working towards an objective allows you to plan big purchases, like houses and cars, without worrying you will miss the mark. Sticking to your budget and putting money aside will bring you a step closer to achieving your financial goals.
Decision-making: It ensures that your decision or the business decisions you are taking are not taken blindly but based on proper research and planning.
Avoid Cash Crunch: A person, firm, or government that efficiently plans and carries out a financial plan can avoid a financial crisis.
Here is a step-by-step way of preparing a budget spreadsheet:
Step 1: Open a Google Sheet
Step 2: Create a budget and actual spend columns
Step 3: Decide if the weekly or monthly Budget Period will suit
Step 4: Use simple descriptions and formulas to enter or show how you want to plan
Step 5: Add your budget numbers for the projected spends
Step 6: Update your budget as you make your research on that purchase and as you spend, enter the figure into the actual spend
Step 7: Keep a tab on overspends and savings for each spend or purchase
Here’s how to use the budget spreadsheet the easiest way:
Put together all the sources of income, as well as all expenses: A personal budget spreadsheet should be separate from the budget spreadsheet for the household. Couples can add up their sources of income to come up with the final income amount. The same process is followed in calculating expenses.
Create savings goals: After the total expenses have been deducted from the total income, check if there is any money left over. If there is, plan what to do with the rest instead of spending all of it on random things. For example, you may want to set aside a part of it for travelling or an emergency fund. You can also show how much of the money left over you will set aside for each of the spending categories.
Come up with budget amounts: After the first two steps, it is important to create a budget for other necessities such as groceries, shopping, or date night. For couples, it is important to be open to one another and include what hobbies or crafts you want to spend on.
On that note, we have an amazing gift for all parents budgeting for back-to-school shopping.
Schoonomics!
What is Schoonomics? Getting the kids back to school on a budget.
This is the top conversation in every mom group right now. As exciting as it is to get them back on a schedule, the cost of back-to-school shopping is NOT FUNNY!
A lot has changed over the years, and rising inflation has hit every single item on your back-to-school list. So in line with the few budgeting recommendations above, our Herconomy community Parents, some back-to-school tips to get the kids back to school on a budget;
Take stock of school items and accessories such as uniforms, socks, shoes, and bags still in good condition. As the saying goes; ‘if it’s not broke, don’t fix it.’
Make a list and stick to it. Use the list recommended by the school. You can use this free school shopping list to ensure all the details are covered.
Resist the temptation to buy 'cheap', because of your budget. Reduce quantities but never compromise on quality school supplies.
We highly recommend SKIT Stores for your kid’s shopping. With branches in Lagos, Abuja and Port Harcourt, and online shopping options, you are pretty covered.
SKIT Store is offering a 5% discount to the Herconomy community this period.
Use the discount code below to access your discounts both in-store and online.
Code: herconomySKIT22
Stay tuned for more interesting tips on budgeting with us. Don’t forget to visit www.herconomy.com to catch up on more financial education.