Determining causes and effects of not keeping a personal budget
William E. David
ENG115- English Composition
Prof. Sandra McDonald March 10, 2015
It has been observed that most of the employees of Bank of America create individual budgets but do not keep a record of them. This is because most of the employees return to the bank for personal loans just two weeks after receiving their salaries. Due to this finding, the factory utilized financial analysts and decided to develop measures of controlling and curbing extravagance among the bank’s employees by enabling them to be able to keep their own budgets. The financial analyst described a budget as a compass and a mirror of how funds will be spent. It is termed as a compass since
…show more content…
Brott (2007) observed that it is not what is earned that gives someone financial security, but what is saved (Brott, 2007, p.42). After about three weeks, after salaries are paid to the employees of the bank, it has been observed that most of them showed low self-esteem. It was discovered that this was because they borrowed money and became debtors, which is a haunting condition. After borrowing money, one assumes the position of a debtor - a person who owes another and who automatically gives the lender the power of auctioning property in case of failure to pay the debt. The thought of being a debtor may result into withdrawal from a healthy lifestyle, which is being happy. When this dreaded possibility happens, lenders may be robbed of their active social life. This also has an ill effect on the future dreams of a person. It implies that whatever desire such as purchasing assets that one may have for the future will have to be delayed while waiting for a fresh financial start due to the loan payment. The leading second cause of not keeping personal budgets as observed from the study was that employees gave up too soon after tabling their personal budgets through ignorance. Also findings revealed the lack of discipline of the bank employees towards their budgets after developing them. The employees would tend to quit being governed by the budgets. Quitting was due to the frustration of things not working out as planned. They
The concepts throughout this book are simple but they test self-control and patience, which in our world is uncommon because of the “want it now” attitude. Ramsey talks about how “personal finance is 80 percent behavior and only 20 percent head knowledge” (ix). This main idea is something Ramsey talks about and references throughout the whole book. Another main idea or as Ramsey calls it a “motto” that’s on each page at the bottom is “If you live like no one else, later you can live like no one else” (5). This is the theme that he refers back to on
Whew, where to start? The personal finance class through Dame Ramsey’s Foundations in Personal Finance textbook and video series really had a lot of useful information, and it is hard to pick out the most impactful chapters and topics. However, I think the most important stuff for me was his five foundations for financial success, which were reinforced throughout the course. I am not downplaying the other important stuff in the course, including learning about the history of credit, budgeting, consumer awareness, investing, insurance, and taxes, but I think that mastering the fundamentals is important, which is why I am choosing to highlight them in this paper.
This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).
A budget is something I take as seriously as education: without it, you’d be nowhere but miserable. My mother racked up a lot of debt before leaving my dad and I. She was and is legally supposed to send child support, but she never has. My dad spent until 2008 trying to repay the debt she left us with while she was living in Hawaii buying multiple cars and living in luxury. When I was old enough to understand this, I promised myself that I would never go into debt if I could help it. At my school, Personal Finance is a graduation requirement; while some students were complaining that we were only watching Dave Ramsey “ramble on”, I took it with all seriousness. I would rather listen to Dave Ramsey talk about budgeting on the radio in exchange of not going $60,000 in debt and losing my house because the payments are too steep. As Calvin Coolidge once said, “The only way I know of escape from that constant tragedy is to keep running expenses low enough so that something may be saved to meet the day when earnings may be small.” Knowing that President Coolidge not only shared this value, but practiced it in everyday life as well, made me respect him even more than I already
Breakfast =$3, Gas+ $24, Lunch= $8, Pharmacy expenses = $12, Dinner +$10. Total = $67
A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.
Personal Budget Exercise – Excel Creating a spreadsheet track personal business expenses is an excellent use of Microsoft Excel. For this exercise, you will create a spreadsheet to enter a personal budget and track actual expenses for the year. You may choose to use real data or create a fictitious budget using a monthly income amount of $2,500. Here are suggested budget categories if you are not using a real budget. At a minimum, you must have 9 budget categories: Housing (mortgage or rent) Utilities Car payment Insurance Student Loans Food Misc. Entertainment Gas Savings
Thesis: Today I will inform the audience of the power of saving small amounts of money for the future and how compound interest works in their favor when they start saving as soon as possible.
A budget can be disadvantageous also. There is judgment and subjectivity in the budgeting process. It does not consider quality and customer service. Budgets can be seen as pressure devices imposed by management, thus resulting in: bad labour relations. Budget could results departmental conflict arises due to disputes over resource allocation, and departments blaming each other if targets are not attained. It is difficult to reconcile personal and corporate goals
1. Brigham, Eugene F. and Michael C. Ehrhardt. Financial Management Theory and Practice, 13th Edition, Thompson South-Western, ISBN-13# 978-14390-7809-9, ISBN-10#1-4390-7809-2
Most entities and organization create budgets as a guide for controlling its spending, prediction of profit, and it expenditure as they progress toward a set goal. Budget involves pulling resources together to achieve a specific goal. According to Gapenski (2006), budgeting is an offshoot in a planning process. A basic managerial accounting tool use in holding planning and control functions together is referred to as set of budgets (p. 255). One major setback manager or budget developer encounter is trying to design a future, a process that cannot be created with the precision just right. This article highlights some financial management
Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.
One major reason that an individual does not keep a personal budget would be the lack of knowledge on how to possess a
“It’s clearly a budget. It’s got a lot of numbers in it” (George W. Busch 2005). This definition of a budget can be supplemented using the Oxford dictionary, which states that a budget is an estimate of income and expenditures for a set period of time. Nowadays almost every business uses budgets and managers use them as a tool in order to set targets. In other words managers can, with the use of budgets, explain in a financial way what are the
Budget and budgetary control practices are undeniably indispensable as organizations routinely go about their business activities and operations. These organizations are constantly on the alert on how actual levels of performance agree with planned or budgeted performance. A budget expresses a plan in monetary terms. It is prepared and approved prior to a particular budgeted period and explicitly may show the income, expenditure and the capital to be employed by organizations in achieving their goals and objectives.