16th March - 23rd March 2013: My Personal Budget
Definition: A personal budget shows both your planned and actual income and expenditure for a selected period of time (i.e. a week or a month or a year). The budget enables you to be able to compare your planned and actual spending habits and how it can be improved. Purpose: The purpose of having a personal budget can be described in three easy footsteps… 1. The “budgeter” can ensure they don’t spend all of their income and become in debt because they have too much expenditure 2. They can analyse and increase efficiency of their income 3. They can split their expenditure into two categories: the first “ essential” and the second “non-essential” expenditure so that they can make their money go further Below I have produced a spread sheet showing both my planned and actual expenditure for the week from 16th March to the 23rd March 2013; the week I have chosen to conduct my personal budget is considered to be an average week for myself. I have also included a description of each part that has been included in my personal budget and have explained how it is useful when producing the budget. The budget is made up of seven key areas:
Income- this is all of the money you receive or plan to receive for a selected period of time Essential expenditure- this is the amount of money you ‘have’ to spend and is not an option (this can include travel to work or lunch) Disposable income-This is the difference between your income and essential expenditure, it can be saved or used for optional spending. It can be used to pay for luxuries such as the cinema. Planned savings- This is money you have planned to save, it could be automatically taken out of your wages by standing order Available for optional spends- This is an amount that can be used for personal purchases Optional spends- This amount should always be less than ‘available for optional spends’ these purchases should be optional and the persons choice. Discretionary...
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