Budgeting Accounting Financing and Investing

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Budgeting Accounting Financing and Investing

Hi there,

My name is James Maina Mwangi. I hold an undergraduate in Finance and on my way to clinching my post-graduate, also in finance.

Welcome to this resource on Budgeting Accounting Financing and Investing

In here, I share very complex information on Budgeting Accounting Financing and Investing.

To make it pretty easy for you, I’ve done the complex content in very easy and flowing notes. You’ll find many graphics to help you

digest concepts and have them easy-to- recall.

 

 

 

CHAPTER 1 : BUDGETING

According to www.mymoneycoach.ca, Budgeting is the process of creating a plan to spend your money.

 

When budgeting, you come up with a plan for spending. That spending plan is the Budget.

 

 

 

 

 

Source:https://www.mymoneycoach.ca

But why a budget?

It allows you to pre-determine whether the resources you have will be adequate for the plans you’ve made.

The fact remains,  our wants are always numerous, while resources are ever scarce.

It allows you to pre-determine whether the resources you have will be adequate for the plans you’ve made.

According to www.creditdonkey.com only 32 percent of U.S. households prepare a monthly budget.

 

 

 

[How many Americans actually keep a formal budget?

A Gallup poll found only about 1/3 of Americans (32%) maintain a household budget

  • Only 30% of Americans have a long-term financial plan that includes savings and investment goals
  • You’re mosty likely to budget if you make at least $75,000 per year]– https://www.debt.com/statistics/

Do not be among them. Make a habit of planning on how to spend your resources.

There two key components that come with budgeting:

  1. Forecasting

 

  1. Planning

Therefore, we can  now talk about  budget planning and forecasting. The key point to note here is :

  • A budget lays down the plan of spending, while  forecasting makes a prediction of the actual expectations.

 

  • A plans is the detailed record of activities to be accomplished.
Within the budgeting context, it’s the means to attain a goal through the set strategies. It’s a sequential procedure that enables control.

Here’s an graphic to assist in creating more clarity between the two(planning and forecasting)

Source: Statewide Instructional Resources Development Center

 

 

In terms of pictures, here is a simple table for reference.

You can use simple spreadsheets in your planning.

Better still, enhanced tabulation and extracts like pie charts help you get the visual figures.

Looking at the items below for a simple hypothetical budget: Basics come first. Food shelter and clothing.

Beyond that, the mounts are shared according to preferences for secondary needs.

Some savings, a holiday, education- serves a great purpose whether continuing or servicing student loans!

 

 

HOUSING 20
FOOD 62
CLOTHING 20
HOLIDAY 40
SAVINGS 10
EDUCATION 60
INSURANCE 10

 

 

 

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