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Personal Budget-
The key to a more secured financial future
What is Personal Budgeting?
 A budget is an assessment of income and expenses for attaining financial goals
 Personal bu...
Key Elements
 This presentation will help you understand-
Importance of Budgeting
Steps to be followed
Ideas
Why prepare a budget?
Why is budgeting important What happens when you don’t have a budget
• Helps you identify and achiev...
Preparing your Personal Budget (Step 1-3)
• Determine how to track the
budgetary information.
Step 1
• Determine your inco...
Preparing your Personal Budget(Step 4-7)
• Compare
• income> expenses
• Income< expense
• Income =expenses
Step 4
• Determ...
Additional Saving Ideas
 Cut down on unnecessary expenses least till the time your financial
situation is stabilised
 Ke...
Key highlights
 Devising a basic budget of personal finance is the key to financial security
 The basic comparison betwe...
 To learn more about Finance Management, visit http://bit.ly/24oII0K
 Explore the next level in distance education at ww...
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Personal budgeting

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A personal budget is a key to a secured financial future of an individual. It determines the expenses against the income and emphasizing on savings.

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Personal budgeting

  1. 1. Personal Budget- The key to a more secured financial future
  2. 2. What is Personal Budgeting?  A budget is an assessment of income and expenses for attaining financial goals  Personal budgeting is about understanding the equation between an individual’s income and expenses to regulate the usage of money.  Understanding personal budget results in a healthy financial life of an individual.
  3. 3. Key Elements  This presentation will help you understand- Importance of Budgeting Steps to be followed Ideas
  4. 4. Why prepare a budget? Why is budgeting important What happens when you don’t have a budget • Helps you identify and achieve financial goals • Helps you manage your money • Increases your saving • Directs your money flow. • Prepares you for contingencies • Provides sense of financial security • Without a budget, your are unaware of your financial situation. • By surviving month to month, you are not prepared for any emergency. • No budget = No savings. • No investment ideas if you do not know your budget • Absence of a budget can keep you in debts.
  5. 5. Preparing your Personal Budget (Step 1-3) • Determine how to track the budgetary information. Step 1 • Determine your income from different sources • Average out income over a longer period- minimum of 6 months Step 2 • Determine your expenses by dividing into 3 categories Step 3 Discretionary category WANTS —expenses on recreation & entertainment, vacations, gifts, similar other expenses Variable category NEEDS—Expenses on grocery, fuel/transport, phone calls, medical, similar other expenses. Fixed category Home loans, taxes, insurance, child education, Insurance premiums Loans should not exceed 50-60% of income Expenses that cannot be modified Average out your expenses Track your expenses for 2-3 months Do not change the spending habits
  6. 6. Preparing your Personal Budget(Step 4-7) • Compare • income> expenses • Income< expense • Income =expenses Step 4 • Determine your financial goals • Child education/ marriage, retirement Step 5 • Improve your situation by increasing your income. • E.g alternative sources of income or increment Step 6 Step 3 Step 7 Review and evaluate your progress
  7. 7. Additional Saving Ideas  Cut down on unnecessary expenses least till the time your financial situation is stabilised  Keep a watch on your monthly expenses  Invest a small portion of your income in the best available savings schemes commensurate to your income  Avoid using market credit (credit cards, personal loans etc) or if you must, keep it at minimum  Opt for additional source/s of income
  8. 8. Key highlights  Devising a basic budget of personal finance is the key to financial security  The basic comparison between income and expenses determines the financial objective of an individual  Monitoring is more important than planning, keeps you updated on a daily basis and helps you remain on track
  9. 9.  To learn more about Finance Management, visit http://bit.ly/24oII0K  Explore the next level in distance education at www.welingkaronline.org

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