A Budget is basically a financial document that encompasses planning for future savings and expenses. It provides a future picture of the expenditures and revenues and also helps in t he future spending pattern whether it be an organization or an individual.
There are not eight but six key steps in the Budgeting Process which are as follows:
- Determine your total monthly income
- Separate the expenses into fixed expenses and variable expenses.
- Find your discretionary income which is the difference between the expenses and the total income.
- List all of your unsecured debts which includes the credit card bills, monthly interest payments etc.
-- Determine if there is any income left after paying off the debts. If the amount is in negative, you must skip the 5th step. You must work on making this figure positive.
- Establish long term and short term goals according to your needs. Make a list and get started this very month.