Personal or Family budget have an important role, but very confusing if we do not directly put it into practice. in this article I will give some suggestions for your calculations. In the book "Millionaire Next Door", Danko and Stanley have stated that their study shows that rich people take the time to create and check the budget two times more than ordinary people. This shows that the financial budget for the manufacture of personal or family is one of the processes that are important in managing our personal budget.
However, because in making the budget that we have to predict the future, sometimes we do not know exactly how much revenue or how much spending to one of the fields. Sometimes we can only estimate the range of values. Let's say we do not know the exact price of the discount should we buy for the holidays this December. But we can estimate that it costs about $200 - $300 every person. Well, in this article, we learn about how to incorporate these values into our budget.
Say Mrs. Desy work part time as a designer clothing company. The pay is calculated based on an acceptable design. For each design, Mrs. Desy receives about $10, -. Every week Mrs. Desy make 10 designs, and the company usually receives about 30% -50% of the design of Mrs. Desy.
Now let us compute income per month is estimated Mrs. Desy. Every week Mrs. Desy make 10 designs, we assume there are 4 weeks in a month, so per month Mrs. Desy made 40 designs. The company receives about 30% to 50% of the design of Mrs. Desy, in other words the acceptable number of designs is about 12 to 20 designs. Multiplied by $10, then we find that the estimated monthly income is Mrs. Desy $120, - $200.
Well, in making the budget for revenues such as this, Mrs Desy must use pessimistic calculation. Meaning? In the span of the calculation results ($120 - Up to $200), Mrs Desy take the most SMALL numbers to put in the budget. In this case, the budget Mrs. Desy stated that his monthly income is $120.
Why do we take the smallest amount of our revenue in the budget? The aim is that spending plan, we create a plan that does not spend more than $120. What if it turns out this month's revenue was $200? While we only make a planned expenditure of $120? Now, if this happens Mrs. Desy means having more money amounting to $80. This money can be saved or used for other purposes.
On the other hand, if Mrs. Desy wrote an income of $200 in the budget, and make a budget of $200 as well. Jean will not be discouraged if it turns out his income at the time of $120 -. There is a shortage of money amounting to $80, -. And if this happens to lack an important expenditure items, do not want to Mrs. Desy debt or sell asset to cover those costs.
So the revenue and expenditure budgeting personal or family, we need to realize that the better principle, there is excess money rather than lack of money. To prevent that from happening short of money, then to estimate the income we use pessimistic calculation. Taking the smallest number.
Optimistic calculations Used for Budget
University Entrance Fee is based on the value of X is obtained by a prospective student at the time of entrance examination. For Grade A, the entry fee is $500, for Grade B, the entry fee is $700, C Grade for the entry fee is $900 - while for Grade D entrance fee is $1100, -. Son of Mr. David would enter the University of X in the coming year. How much money should be prepared by Mr. David assuming no increase in cost to enter the university X?
Well, the opposite of budget revenues, to estimate the cost we have to use optimistic calculation. Take the BIG value. In the above case, the answer is simple. Mr. David has to provide money amounting to $1100, - for the money entered the University of X.
Now the question, if Mr. David has given money amounting to $1100 -, and it turns out his son pass the entrance exam with an A. What happened? There is no problem. The boy managed to save on college entrance fee of $600 -. This money could be allocated for other purposes. Mr. David can buy gifts in exchange intelligence.
On the other hand, what if Mr. David just provide money amounting to $500, - then it turns out his son just got a Grade D in the entrance examination X? Here's a new problem occurred. Mr. David is not enough money to pay the money to the university. Usually such problems are solved by debt, sell assets, or look for other universities. In the worst case, the child is not college. Of course we all do not want this to happen.
Return to the principle of making the budget earlier, there is excess money is better than lack of money. In the calculation of costs or expenses we have to use optimistic way. Take the highest cost estimates. In this way we will avoid financial problems.
Source: Keuanganpribadi.com