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Personal budget

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Introduction

A personal budget is a plan in which individuals or family money is spent over a period of time. A personal budget is used to plan their money in order to avoid spending more money then they earn. A personal budget is a plan in which individuals could use so they can make the right decisions, choices and use of their income and expenditure. By using a personal budget it can help the individual or family make sure that they have enough money for their expenditure. You can plan your personal budget on a weekly, monthly or an annual bass. The personal budget will include the following: Income The budget will need to show the amount of income you earn for the following budget? E.g. weekly, monthly or annual. The income will only be the amount you have to spend once your salary deductions have been made. You should only put the amount of income you would likely get because your income could very from time to time e.g. do overtime, earn extra cash, unexpected bills or emergencies. The types of income that you could have could be the following: * Wages or salary, after deductions. * Borrowed money, such as loans or credit to buy gods. * Regular allowances. * Gifts and inheritance. * Fees earned. * The sale of personal items. * State benefits. * Grants. * Interest from savings. * Return on investments. Expenditures Once you have assessed your income then you should then work out your levels of expenditures. ...read more.

Middle

Secured loan. A secured loan means you can give up security for the money you borrow in the form of your home, you can spread your repayments over a long period, which should make your monthly repayments easier to manage. If you are planning a large purchase and you want to spread your repayments over a long period of time then the secured loan is the best option. Professional studies loan. When your career calls for professional qualifications, the professional studies loan gives you the practice support you need. To ease the financial pressure, you can take money out as when you need it and delay repayments for up to 6 months after you finish your course. Graduate loan. After you have gained your degree and you need extra financial support to help you make your way through then a graduate loan is what you need. A graduate loan lets you borrow money with fixed monthly repayments. With this loan you also have the optional of an initial 4 months repayments 'holiday' to make it even easier to manager your finances. Career development loan. The career development loan can be used to finance vocational study or training courses of two years duration, or longer if the course has a year's supplied experience built in. All of the above loans will include APR (annual percentage rate) Leaders must quote an APR as well as the applied rate. The APR is intended to help customers compare the true cost of loans offered by different banks. ...read more.

Conclusion

The disadvantages of not having a personal budget is that you do not know where all of your money is going and you also don't realize how difficult it is to keep track of where all of your income has gone. The advantage of not having a personal budget is that you do not need to go through all of the hassle of setting the personal budget up and some people would prefer it if they didn't know where all of there money has gone. There are different reason why people set up a personal budge ad there are reason why some people decide not to set up a personal budget. The personal budget works differently with different people and it also has different affects and outcomes. Below are two examples of a personal budget for a student and an employed adult. Looking back at the student's personal budget it shows that in May the student went �8 over. The student's income was �310 and the student's expenditures total was �318. The decision that the student made was to take �10 out from the savings. I think this was a good idea as the student had savings put away but without the savings then the student would have had to think of other ways to get the money e.g. borrow it from somebody. Looking back at the adult's budget it shows that the adult's budget was fine and that the adult didn't have any surpluses or deficits. This shows that the adult had enough income to cover all of the expenditures for the year. ...read more.

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