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MYIRIS BUDGET PLANNER


Who says that Yashwant Sinha is the only person who has to juggle finances? Come to think of it, handling household budgets is a far trickier and exhausting task. One needs to do this exercise every month while our Finance Minister needs to do that about once a year! Wouldn't you agree that biting the bullet is easier at the National level, than at the household level? Well, for those who have a happy go lucky attitude with money, this site is a definite no-no. For those who have had pious intentions of starting to maintain an account of your flow of funds, better start NOW.

A budget planner helps to estimate how much surplus money one has at the end of the month. The key here lies in determining where your money is being spent. Its not just a question of saving up for the rainy day, its how to get more from your saved bucks, if you mange to do save in the first place. Much like our government's Five Year Plans, buying your own car, fridge, house are just some of the activities which require loads of thought and planning. No doubt managing your monthly budget can be difficult and frustrating, but making an honest attempt always pays dividends. Buying that car or house is that much simpler and tension free than finding that you cannot cough up the EMI or pay the instalment for the house.

To get you cracking on how to design a Budget Planner, here are a few basic steps. You needn't be a Chartered Accountant (CA) knowing the latest GAAP practices for doing this. Having said this, some knowledge of numbers or atleast being nifty with a calculator, does help!

STEPS IN A BUDGET PLANNER


STEP 1


The first step in designing a Budget Planner is to decide your normal expense categories. These would range from the expenses made for the mundane day-to-day chores or paying a monthly, bi-monthly bill. So begin by writing down your Normal Expense categories like say:

a)   Rent/Society Charges
b)   Groceries
c)   Travelling
d)   Utilities (Phone,electricity)
e)   Loan Re-payment
f)   Entertainment
g)   Clothing
h)   Vehicle Expenses
i)   Education
j)   Other Expenses



STEP 2
Total all these expenses and there you have it. Not only do you get to know whetheryou have living on the wild side with your expenses, you also get a fix on the areas of your profligacy.


STEP 3
Deduct the expenses you computed from your total income accruing from all sources to get the savings. Taking an example is probably the best way to explain this:

Mr A and his wife are the two earning members in a family of four (Husband,wife and their kids)

Mr A let us suppose is an executive earning a salary of 15000 Rs per month

His wife is a banker and brings home a salary of Rs 25000 Rs per month.

Thus the family's total income is Rs 40000 per month.

Mr A desires that the family should buy a car and he asks his wife (after all she is a banker) to find out if they can afford a car. His wife swings into action to do the needful. She computes their expenses under the following categories:

a)   Rent/Society Charges -- Rs 4432
b)   Groceries-- Rs 1000
c)   Travelling-- Rs 1500
d)   Utilities (Phone, electricity)-- Rs 3000
e)   Loan Re-payment -- Nil
f)   Entertainment-- Rs 1000
g)   Clothing -- Rs 800 (The lower amount is attributed to the shopping binge during Diwali time)
h)   Vehicle Expenses -- NIL (They have no car at present)
i)   Education -- Rs 3000 (Didn’t you know education costs are killing nowadays)
j)   Other Expenses -- Rs 2000


Therefore the total monthly expenses are ( Rs 4432 + Rs 1000 + Rs 1500 + Rs 3000 + Rs 1000 + Rs800 + Rs 3000 + Rs 2000 ) = Rs 16732. They therefore save Rs 23268 and can therefore COMFORTABLY AFFORD A CAR as they are eligible to car loan of various finance companies.
While most of the above example may look like stating the obvious and an insult toyour understanding, the truth is somewhat different. Most people, a majority of the times,forget to start from the basics even thought that’s the simplest way to start things.
 
 
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