Budgeting How to do it and why?
By budgeting gradually comes everyone who uses personal finance accounting software. The reasons are probably different for everyone, but they actually boil down to one thing: to make your financial accounting more efficient, i.e. to have more money in your pocket, for it is precisely for this that people begin to count them.
The problem is that not all budgets will make your spending more moderate, your behavior more reasonable, and the financial balance more “positive”. The reason is not only in your consumer habits, but also in how you approach budgeting.
As always, if you approach the issue systematically, the result will be more predictable and pleasant. And what could be more systematic than the public finance system? From there we take the main points for the formation of a personal budget.
')
The question seems to be indisputable (for the purpose, it is always better than without it), but few people ask this question before putting the figure “15%” opposite the “Food” column. And in vain. Because it is the goal that should determine, on the contrary, which graphs which number to put.
Recently, the federal and regional budgets have always had a social goal. This is partly dictated by the election promises of one person, partly by the low efficiency of other types of budget expenditures, in part by the low level of public debt and large reserves of the national wealth fund and reserve fund. But if we recall the beginning of the 2000s, then the main task of the federal budget was to pay off foreign debt, which was practically able to cope with by the middle of the decade.
Thus, a budget must always have a goal. In the case of personal budgets, the goal must be understandable and tangible.
Here are just a few options for budget goals:
It would seem that all these goals are very similar. At least those that offer to set aside part of the funds instead of spending them. Why is it simply impossible to write: “to postpone 10, 15, 20, ..., n thousand rubles”, and write the rest in categories of expenses? Because it is important not only how much you save money, but also on what you save.
For example, the first item can be considered as an investment if you give each month a couple of thousand rubles interest and / or a credit card commission. Thus, the return of debt will allow you to get rid of these monthly wastes.
The second item is mandatory one-time waste, i.e. you cannot avoid it, therefore you will either borrow to celebrate a birthday, or you will comprehend the basics of Orthodoxy (no hatred) until the next salary.
The third point is probably familiar to many. Yes, this is the Motorola C350! But in the context of budgets, this is a waste, for which it is necessary to save a part of their income for 1-3 months. Those. not too long-term financial goal. Practice shows that the usefulness of these goals is also often not too "long-term."
The fourth point is more interesting. It does not imply large one-time expenses (assuming you already have a “colorful” shotgun), but if you play four times a month, you end up with a rather round sum. This is the first reference to the uniformity of costs, which will be discussed below.
The fifth point is a very long-term goal. Its usefulness may also be questionable, but what is important is that you want to fulfill it and this will require a very serious organization from you, as well as a long substantial limitation in funds. Looks like a mortgage, right? This is it :)
The sixth item is the budget in pure form. Those. the goal, which by default should be in front of every budget.
If you often encounter a situation of lack of funds in the last days before another income, set yourself first goal number 6. Hurry and immediately save up for a new Rolls-Royce Wraith is not worth it, because the habit of limiting spending should first become a habit, and it can take up to six months or more. The next item should go to goal number 1. In general, we will also talk about debts sometime. Further, numbers 2, 4, 5. And if we have already passed the mortgage, you can afford the Motorola C350.
The possibility of budgeting funds on time programs for accounting personal finances are practically not provided. Although it practically does not allow to achieve the goal under item No. 4, and most importantly, under item No. 6. Achieving other goals also makes it difficult.
Again, turn to the state budget system. You can often hear criticism from the governor, the mayor, the city manager, etc. in respect of committees, ministries, departments, etc. for low budget execution. And this criticism begins to sound already in March, when, it would seem, it is still possible to fulfill this with a budget, which will be criticized for completely different and completely different people.
The reason is that the sovereigns realize that over the past two months the budget cannot be executed (jokes about Sochi are welcome) and they require the use of resources, where possible, throughout the year. In addition, it simplifies the work of the treasury, which happens, does not have time to sign all the bills at the end of the year, but such problems should not arise with personal finances.
In addition, evenly distributed budget allows, as already mentioned, to more effectively achieve goals, because You are not staying by the end of the month before choosing to eat or pay for a mortgage.
And also it allows you to normalize your consumer behavior. You do not face a situation where you have to significantly limit your spending for several days, because you have 500 rubles in your pocket before the end of the week. Accordingly, you do not have a deferred demand for pleasure, which you hypertrophically satisfy after earning an income. So, you sleep well, eat well, smile like on clip-art and feel good and confident.
To do this, you need to take your income, deduct from them the constant monthly expenses (rent, rent, travel card, Internet, gym, etc.) and divide the remaining money by the number of days in the month.
You will get some figure that will be your daily budget. Usually this stage makes you wonder if you need a Motorola C350? If in doubt, take its price, divide by the number of days in a month (or in several months if you save for several months) and subtract from the daily budget.
A daily budget is not a good indicator due to the volatility of daily spending. As a rule, for many it will be lower than a good trip to the grocery store, but this does not mean that if you are going to buy food in the evening, then you will go to work on foot. Therefore, it is better to multiply it by 7 and work with a weekly budget.
Also note that your consumer behavior changes over the weekend. For example, my expenses on weekends are growing three times. This should also affect your budget on weekdays.
PS The simple model described in the framework of the second thesis is based on the Max Krainov's “4 envelopes” system, www.4konverta.com, and is only suitable for budgeting with stable periodic (usually monthly) earnings. I'll try to write about budgeting with non-periodic incomes too.
There are often problems here, especially if we recall the “15%” opposite the “Food” column. As a rule, these figures are taken from the head according to the principle: “I will write less - spend less”. Of course, the effect of this rule does not extend beyond the head.
The “reality” of the budget in the state system is partly ensured by the budget code, which does not allow to form a budget with a large deficit. In addition, low execution allows you to have account balances, the regions themselves can, in case of something, attract some “cheap” money from the market, as well as to place available funds for a very short period (several dozen days) at a small percentage of banks for a year.
In general, in the budget system there are a few more tools for ensuring balance; in the personal finance system there is only one’s own income and calculations. Therefore, to specific figures, how many percent for which category, it is worth moving only after you have calculated your daily and weekly budgets.
In addition, these figures are only relevant for those expenses that cannot be attributed to goals, daily and weekly expenses. Because the volume of these expenses is usually stable and in the first stage it is better for you not to cut them significantly, but just to keep them in mind.
And only after you have allocated from the budget mandatory goals, stable monthly, weekly and daily expenses, you can take the rest of the budget and distribute it "from the head" for those joys that are not included in your goals and do not ensure your daily existence. No money left for "joy"? Welcome to our world! :)
Take a person with a monthly salary of 30 000 rubles.
Suppose that every month he pays
Total: 10,000 rubles.
Thus, 33% of the budget goes to a stable monthly cost. Remains 67% (20 000 rubles.)
If in the next month there are no mandatory goals, then you can proceed to the calculation of daily and weekly budgets. If there are goals, then they should be subtracted from the remaining 20,000 rubles. and distribute the remainder.
Suppose a person does not have mandatory goals, therefore in November he has 666 rubles a day or 4662 rubles. in Week.
Here you can already take into account the difference in behavior on weekdays and weekends. Suppose that on weekends expenses are doubled, i.e. the budget on a weekday will be 518 rubles, and on weekends 1036 rubles.
Now for daily / weekly expenses:
In one working day, our prospective person spends 80 rubles. on travel in transport and 150 rubles. for lunch.
To understand how much interest it takes in a monthly budget, you need to understand how often do you use public transport on weekends? If so, multiply 80 by 30, as well as an additional 1.2. This ratio will ensure the "reality" of the budget. For different expenses and for different people it will be different, but in the general sense 1.2 is “enough for everyone”. If you are not using public transport at the weekend, multiply by a factor of 0.9, but rather do not multiply by anything: just leave 80 * 30.
So, our man goes to friends on weekends and eventually spends:
(80 * 30 * 1.2) / 30,000 = 0.096 = 9.6% ~ 10%
For lunch he spends:
(150 * 30 * 0.9) / 30,000 = 0.135 = 13.5% ~ 14%
Now, 67% of the remaining budget after deducting daily expenses is 43%.
Once a weekend, our humble imaginary friend goes to the grocery store and buys food for 1000 rubles. In addition, another 500 rubles. a week goes on groceries on weekdays.
In the month we have 4.4 weeks. In addition, for calculations here, the coefficient does not interfere either, but since the period is longer, it can be reduced to 1.1. In fact, you can simply use 4 weeks and a standard rate of 1.2 (the same as daily spending).
So, on the products per month goes:
(1500 * 4 * 1.2) / 30000 = 0.24 = 24%
From the budget now remains 19% or 5700 rubles.
Not a very big amount, but the Motorola C350 should be enough.
1. To count your budget is useful. It will be sad only in the first months :)
2. It is not necessary to keep financial records for this. You can only record your expenses for a week in order to understand approximately how much you spend and on what, as well as how your consumption differs on weekdays and weekends. The main thing is that this week should be typical, i.e. without extra weekends and without major expenses, besides you should not significantly limit yourself in spending.
3. For peace of mind, it is enough to keep in mind 3-4 figures: the daily budget on weekdays, the daily budget on weekends, the weekly budget and the rest of the budget after deducting all mandatory expenses (the same 19%). You can limit yourself to the average daily budget and the estimated balance, this, in principle, will be enough.
4. It is necessary to recount your budget whenever your stable permanent income grows, as well as when compulsory spending appears or changes. For prevention, it will not be superfluous to do this once a quarter in order to catch changes in your expenses in time.
5. Additional income (bonuses, gifts, lottery winnings, etc.) should not be taken into account in the budget. It is better to direct them to the goal or add to the estimated balance. It’s not worth raising your daily / weekly expenses because it changes your consumption habits, and it can be difficult to recover them.
The problem is that not all budgets will make your spending more moderate, your behavior more reasonable, and the financial balance more “positive”. The reason is not only in your consumer habits, but also in how you approach budgeting.
As always, if you approach the issue systematically, the result will be more predictable and pleasant. And what could be more systematic than the public finance system? From there we take the main points for the formation of a personal budget.
')
Thesis 1: each budget must have a goal.
The question seems to be indisputable (for the purpose, it is always better than without it), but few people ask this question before putting the figure “15%” opposite the “Food” column. And in vain. Because it is the goal that should determine, on the contrary, which graphs which number to put.
Recently, the federal and regional budgets have always had a social goal. This is partly dictated by the election promises of one person, partly by the low efficiency of other types of budget expenditures, in part by the low level of public debt and large reserves of the national wealth fund and reserve fund. But if we recall the beginning of the 2000s, then the main task of the federal budget was to pay off foreign debt, which was practically able to cope with by the middle of the decade.
Thus, a budget must always have a goal. In the case of personal budgets, the goal must be understandable and tangible.
Here are just a few options for budget goals:
- Close credit card
- Mark birthday / anniversary / world day of toilets (this, by the way, today)
- Buy a new phone (because it has a color screen, 24-voice polyphony, GPRS and a phonebook for 100 numbers)
- Play weekend paintball
- Accumulate on the machine
- Do not get into debt to paycheck
It would seem that all these goals are very similar. At least those that offer to set aside part of the funds instead of spending them. Why is it simply impossible to write: “to postpone 10, 15, 20, ..., n thousand rubles”, and write the rest in categories of expenses? Because it is important not only how much you save money, but also on what you save.
For example, the first item can be considered as an investment if you give each month a couple of thousand rubles interest and / or a credit card commission. Thus, the return of debt will allow you to get rid of these monthly wastes.
The second item is mandatory one-time waste, i.e. you cannot avoid it, therefore you will either borrow to celebrate a birthday, or you will comprehend the basics of Orthodoxy (no hatred) until the next salary.
The third point is probably familiar to many. Yes, this is the Motorola C350! But in the context of budgets, this is a waste, for which it is necessary to save a part of their income for 1-3 months. Those. not too long-term financial goal. Practice shows that the usefulness of these goals is also often not too "long-term."
The fourth point is more interesting. It does not imply large one-time expenses (assuming you already have a “colorful” shotgun), but if you play four times a month, you end up with a rather round sum. This is the first reference to the uniformity of costs, which will be discussed below.
The fifth point is a very long-term goal. Its usefulness may also be questionable, but what is important is that you want to fulfill it and this will require a very serious organization from you, as well as a long substantial limitation in funds. Looks like a mortgage, right? This is it :)
The sixth item is the budget in pure form. Those. the goal, which by default should be in front of every budget.
Tips
If you often encounter a situation of lack of funds in the last days before another income, set yourself first goal number 6. Hurry and immediately save up for a new Rolls-Royce Wraith is not worth it, because the habit of limiting spending should first become a habit, and it can take up to six months or more. The next item should go to goal number 1. In general, we will also talk about debts sometime. Further, numbers 2, 4, 5. And if we have already passed the mortgage, you can afford the Motorola C350.
Thesis 2: the budget should be even.
The possibility of budgeting funds on time programs for accounting personal finances are practically not provided. Although it practically does not allow to achieve the goal under item No. 4, and most importantly, under item No. 6. Achieving other goals also makes it difficult.
Why is it important?
Again, turn to the state budget system. You can often hear criticism from the governor, the mayor, the city manager, etc. in respect of committees, ministries, departments, etc. for low budget execution. And this criticism begins to sound already in March, when, it would seem, it is still possible to fulfill this with a budget, which will be criticized for completely different and completely different people.
The reason is that the sovereigns realize that over the past two months the budget cannot be executed (jokes about Sochi are welcome) and they require the use of resources, where possible, throughout the year. In addition, it simplifies the work of the treasury, which happens, does not have time to sign all the bills at the end of the year, but such problems should not arise with personal finances.
In addition, evenly distributed budget allows, as already mentioned, to more effectively achieve goals, because You are not staying by the end of the month before choosing to eat or pay for a mortgage.
And also it allows you to normalize your consumer behavior. You do not face a situation where you have to significantly limit your spending for several days, because you have 500 rubles in your pocket before the end of the week. Accordingly, you do not have a deferred demand for pleasure, which you hypertrophically satisfy after earning an income. So, you sleep well, eat well, smile like on clip-art and feel good and confident.
How to make a budget even?
To do this, you need to take your income, deduct from them the constant monthly expenses (rent, rent, travel card, Internet, gym, etc.) and divide the remaining money by the number of days in the month.
You will get some figure that will be your daily budget. Usually this stage makes you wonder if you need a Motorola C350? If in doubt, take its price, divide by the number of days in a month (or in several months if you save for several months) and subtract from the daily budget.
Tips
A daily budget is not a good indicator due to the volatility of daily spending. As a rule, for many it will be lower than a good trip to the grocery store, but this does not mean that if you are going to buy food in the evening, then you will go to work on foot. Therefore, it is better to multiply it by 7 and work with a weekly budget.
Also note that your consumer behavior changes over the weekend. For example, my expenses on weekends are growing three times. This should also affect your budget on weekdays.
PS The simple model described in the framework of the second thesis is based on the Max Krainov's “4 envelopes” system, www.4konverta.com, and is only suitable for budgeting with stable periodic (usually monthly) earnings. I'll try to write about budgeting with non-periodic incomes too.
Thesis 3: the budget must be real.
There are often problems here, especially if we recall the “15%” opposite the “Food” column. As a rule, these figures are taken from the head according to the principle: “I will write less - spend less”. Of course, the effect of this rule does not extend beyond the head.
The “reality” of the budget in the state system is partly ensured by the budget code, which does not allow to form a budget with a large deficit. In addition, low execution allows you to have account balances, the regions themselves can, in case of something, attract some “cheap” money from the market, as well as to place available funds for a very short period (several dozen days) at a small percentage of banks for a year.
In general, in the budget system there are a few more tools for ensuring balance; in the personal finance system there is only one’s own income and calculations. Therefore, to specific figures, how many percent for which category, it is worth moving only after you have calculated your daily and weekly budgets.
In addition, these figures are only relevant for those expenses that cannot be attributed to goals, daily and weekly expenses. Because the volume of these expenses is usually stable and in the first stage it is better for you not to cut them significantly, but just to keep them in mind.
And only after you have allocated from the budget mandatory goals, stable monthly, weekly and daily expenses, you can take the rest of the budget and distribute it "from the head" for those joys that are not included in your goals and do not ensure your daily existence. No money left for "joy"? Welcome to our world! :)
The mechanics of calculating the personal budget I will show by example
Take a person with a monthly salary of 30 000 rubles.
Suppose that every month he pays
- 7 500 rub. for renting a room / apartment + rent
- 1 600 rub. for English lessons
- 500 rub for internet
- 400 rub for phone
Total: 10,000 rubles.
Thus, 33% of the budget goes to a stable monthly cost. Remains 67% (20 000 rubles.)
If in the next month there are no mandatory goals, then you can proceed to the calculation of daily and weekly budgets. If there are goals, then they should be subtracted from the remaining 20,000 rubles. and distribute the remainder.
Suppose a person does not have mandatory goals, therefore in November he has 666 rubles a day or 4662 rubles. in Week.
Here you can already take into account the difference in behavior on weekdays and weekends. Suppose that on weekends expenses are doubled, i.e. the budget on a weekday will be 518 rubles, and on weekends 1036 rubles.
Now for daily / weekly expenses:
In one working day, our prospective person spends 80 rubles. on travel in transport and 150 rubles. for lunch.
To understand how much interest it takes in a monthly budget, you need to understand how often do you use public transport on weekends? If so, multiply 80 by 30, as well as an additional 1.2. This ratio will ensure the "reality" of the budget. For different expenses and for different people it will be different, but in the general sense 1.2 is “enough for everyone”. If you are not using public transport at the weekend, multiply by a factor of 0.9, but rather do not multiply by anything: just leave 80 * 30.
So, our man goes to friends on weekends and eventually spends:
(80 * 30 * 1.2) / 30,000 = 0.096 = 9.6% ~ 10%
For lunch he spends:
(150 * 30 * 0.9) / 30,000 = 0.135 = 13.5% ~ 14%
Now, 67% of the remaining budget after deducting daily expenses is 43%.
Once a weekend, our humble imaginary friend goes to the grocery store and buys food for 1000 rubles. In addition, another 500 rubles. a week goes on groceries on weekdays.
In the month we have 4.4 weeks. In addition, for calculations here, the coefficient does not interfere either, but since the period is longer, it can be reduced to 1.1. In fact, you can simply use 4 weeks and a standard rate of 1.2 (the same as daily spending).
So, on the products per month goes:
(1500 * 4 * 1.2) / 30000 = 0.24 = 24%
From the budget now remains 19% or 5700 rubles.
Not a very big amount, but the Motorola C350 should be enough.
findings
1. To count your budget is useful. It will be sad only in the first months :)
2. It is not necessary to keep financial records for this. You can only record your expenses for a week in order to understand approximately how much you spend and on what, as well as how your consumption differs on weekdays and weekends. The main thing is that this week should be typical, i.e. without extra weekends and without major expenses, besides you should not significantly limit yourself in spending.
3. For peace of mind, it is enough to keep in mind 3-4 figures: the daily budget on weekdays, the daily budget on weekends, the weekly budget and the rest of the budget after deducting all mandatory expenses (the same 19%). You can limit yourself to the average daily budget and the estimated balance, this, in principle, will be enough.
4. It is necessary to recount your budget whenever your stable permanent income grows, as well as when compulsory spending appears or changes. For prevention, it will not be superfluous to do this once a quarter in order to catch changes in your expenses in time.
5. Additional income (bonuses, gifts, lottery winnings, etc.) should not be taken into account in the budget. It is better to direct them to the goal or add to the estimated balance. It’s not worth raising your daily / weekly expenses because it changes your consumption habits, and it can be difficult to recover them.
Source: https://habr.com/ru/post/202720/
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