by Oyeyinka Kehinde

Created on: January 16, 2008

To have financial stability not only a budget, but a well planned budget is needed. What is a budget?............................ a budget is a quantitative express of a planed activities prepared in advance for a specific period. Budgets are always prepared for year(s) ahead, its scope mostly cover 12 calendar months. i.e. a year. You prepare a budget and approved it prior to a defined period of time for the purpose of attaining a stated objective(s), and must be reviewed regularly to effect changes.

HOW TO MAKE PERSONAL BUDGET AND ORGANIZATIONAL BUDGET EXPLAINED

PERSONAL BUDGET
Personal budget is a financial plan of an individual showing the expected income and expenses. This will prevent you from overspending your income. It's an important tool for forecasting a good financial plan.

STEPS TO MAKING PERSONAL BUDGET
Set an Objective: Those things that you and your family will need represent your objective for the budget period. Try to itemize your needs and make sure they are things that your income can cater for. Always make sure they are written in black and white and if you have a computer system, enter them into it.
Set out what you expected income: This is easy to calculate if you earn a fixed amount every month. You will know with ease, how much you earn per annum and if there is any other source of income let it be included.. should you not earn a fixed amount monthly, you have to be very careful in estimating your expected income.
Set out what your expenses is likely to look like: Your expenses may include the money you wish to spend on food, clothing, children school fees, house rent/house maintenance e.t.c. you should also make provision for unforeseen expenses in your budget and outstanding, if any.
Expenses Vs Income: Create a column for your expenses and another one for your income. If your income is greater than your expenses, the you are at advantage but if otherwise, you can consult a professional or cut down your expenses by yourself
Arrange your wants: Those things that you need must be listed in order of importance and ensure you don't spend more than you have estimated for each item. Where you have to spend more, make sure you amend for improvement on future plan.

ORGANIZATIONAL BUDGET
Organizational budget is a forecast of cash-flow of an establishment, be it profit oriented or non-profit making oriented. This can be done using the past records and the present to plan for the future.

STEPS TO MAKING AN ORGANIZATIONAL BUDGET
Formation of budget

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