{"id":245,"date":"2016-08-29T12:43:46","date_gmt":"2016-08-29T12:43:46","guid":{"rendered":"http:\/\/blog.boachsoft.com\/?p=245"},"modified":"2016-08-29T12:43:46","modified_gmt":"2016-08-29T12:43:46","slug":"how-to-create-a-home-budget","status":"publish","type":"post","link":"http:\/\/blog.boachsoft.com\/?p=245","title":{"rendered":"How to create a home budget"},"content":{"rendered":"
\"Creating<\/a>
Creating a home budget isn’t difficut<\/figcaption><\/figure>\n

Home Budgeting<\/strong><\/h3>\n

Many people have difficulty creating home budgets. Where do I\u00a0start?\u00a0How do I go about it? How does inflation affect the home budget? These are some of the questions they ask. I would be\u00a0answering these questions in this blog post. <\/p>\n

<\/h3>\n

What is a Budget?<\/strong><\/h3>\n

First of all \u00a0let’s answer the question: “What is a personal budget?”. The word budget is derived from the old French word “bougette” which means purse or wallet. In Spanish it is called presupuesto.\u00a0The answer to this I am sure is\u00a0all too familiar to many.\u00a0 A personal budget is a finance plan that allocates future personal income from various sources towards expenses, savings and debt repayment.<\/p>\n

 <\/p>\n

A personal budget is important for\u00a0many reasons. Personal budgets allocate resources more efficiently.\u00a0Personal budgets help people to save and\u00a0 to meet financial\u00a0obligations by harnessing the tools at their disposal. A budget also has a psychological effect which helps people to keep their finances on\u00a0track.<\/p>\n

<\/h3>\n

Creating a Personal Budget?<\/strong><\/h3>\n
\"Boachsoft<\/a>
Boachsoft Founder and CEO Yaw Boakye-Yiadom<\/figcaption><\/figure>\n

Creating a personal\u00a0budget can be done with simple tools like paper, pen, calculator and\u00a0envelopes or with the most intuitive, sophisticated but easy to use\u00a0personal finance software<\/a> like my product Boachsoft Finance 2012. I \u00a0developed this product to serve this purpose and much more. Another way to \u00a0create budgets using computers is to use spreadsheets like Microsoft Excel, Lotus and Open Office. While\u00a0 the paper, pen and calculator method is the cheaper of the two this method is the most laborious and there is little incentive for anybody to use\u00a0this method because software is so cheap.<\/p>\n

Whatever method you\u00a0choose you would first have to gather some data. If you are creating a\u00a0budget with software you can do this by entering data over time; you\u00a0would then use reports generated to create a budget. In Boachsoft\u00a0Finance 2012, enter your expenses and income into the registers for the\u00a0various accounts. Assign categories like “food” to them. After about a month click the reports center in Boachsoft Finance 2012 and then\u00a0generate income-expenditure report or budget actual report\u00a0for the previous month. Print and use this data for your budget. You can also use typical published data to create your first\u00a0budget. \u00a0Later in this post you would get some helpful data to help you with your first budget.<\/p>\n

 <\/p>\n

After obtaining your data go to\u00a0the budget center by clicking the button labeled budget from the\u00a0toolbar. Without data this tool can still help you in creating your\u00a0budget. Just look through the categories and enter estimated\u00a0amounts. As you enter budgeted amounts for income and expense\u00a0categories.you would see a summary in the bottom panel. This would also\u00a0tell you whether you are going to have excess funds available or\u00a0whether your finances are going to be in the red. If you are going to\u00a0be in the red then you can think of going for a loan,\u00a0looking\u00a0for extra work. or reducing your expenses. When you have excess funds\u00a0then you can think of taking your family on vacation or investing the money. Boachsoft Finance 2012, converts whatever amount you enter to the daily value even if you enter it monthly, weekly etc. so the amounts the data you enter would vary slightly.<\/p>\n

 <\/p>\n

If you choose to use spreadsheets, there are many\u00a0templates online. Download and start using one these templates.\u00a0However, using a personal finance software is easier than this method.<\/p>\n

<\/h3>\n

Examples of Home Budgets<\/strong><\/h3>\n

I am sure you would agree with me if I say that all hands aren’t
\nequal. In other words incomes vary in market economies. The middle\u00a0class in most countries constitute the largest segment of society so\u00a0typical data provided are usually reflective of budgets from middle\u00a0class families. The upper class constitute just about 1% of society.\u00a0However, whatever class your income places you\u00a0 in,\u00a0 a\u00a0personal budget is a priceless tool.<\/p>\n

 <\/p>\n

The following provides us with data on family budgets. While a budget is\u00a0usually divided into inflows (income) and outflows (expenditure) typical household budget data available only displays expense\u00a0categories. Boachsoft Finance 2012 <\/a>makes it not only possible to budget\u00a0for income categories but makes it very easy. In most developed countries on average the household budget is:<\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n
Category<\/big><\/td>\nProportion<\/span><\/big><\/td>\n<\/tr>\n
Housing<\/td>\n26%<\/td>\n<\/tr>\n
Transportation<\/td>\n23%<\/td>\n<\/tr>\n
Recreation<\/td>\n21%<\/td>\n<\/tr>\n
Food<\/td>\n21%<\/td>\n<\/tr>\n
Clothing<\/td>\n7%<\/td>\n<\/tr>\n
Health<\/td>\n2%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

According to the US Census Bureau the\u00a0median household income for 2014 was $51,939. Accourding to a US Department of Labor report, in 2014 Americans spent\u00a0on average the following amounts on the following categories.<\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
:Category<\/big><\/td>\n2014 Amounts($ USD)<\/big><\/td>\n<\/tr>\n
Food at home<\/td>\n3,971<\/td>\n<\/tr>\n
Food
\naway from home<\/td>\n		2,787<\/td>\n<\/tr>\n
Housing<\/td>\n17,789<\/td>\n<\/tr>\n
Apparel
\nand services<\/td>\n		1,786<\/td>\n<\/tr>\n
Transportation<\/td>\n9,073<\/td>\n<\/tr>\n
Health
\nCare<\/td>\n		4,290<\/td>\n<\/tr>\n
Entertainment<\/td>\n2,728<\/td>\n<\/tr>\n
Cash
\nContributions<\/td>\n		1,788<\/td>\n<\/tr>\n
Personal Insurance and pensions<\/td>\n5,726<\/td>\n<\/tr>\n
Other
\nExpenditures<\/td>\n		3,548<\/td>\n<\/tr>\n
Total<\/td>\n53,495<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

To provide you with more data a typical monthly household budget in\u00a0North America::<\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Category<\/big><\/td>\nAmount<\/td>\n<\/tr>\n
Mortgage<\/td>\n$850.00<\/td>\n<\/tr>\n
Home
\nand Auto Insurance<\/td>\n		$110.00<\/td>\n<\/tr>\n
Natural
\nGas Utility<\/td>\n		$50.00<\/td>\n<\/tr>\n
Electric
\nUtility<\/td>\n		$50.00<\/td>\n<\/tr>\n
Water
\nUtility<\/td>\n		$30.00<\/td>\n<\/tr>\n
Internet<\/td>\n$60.00<\/td>\n<\/tr>\n
Cell
\nPhone<\/td>\n		$80.00<\/td>\n<\/tr>\n
Car
\nGas<\/td>\n		$140.00<\/td>\n<\/tr>\n
Groceries-<\/td>\n$150.00<\/td>\n<\/tr>\n
Out
\nto eat\/fun money<\/td>\n		$50.00<\/td>\n<\/tr>\n
Home\/Vehicle
\nMaintenance Envelope<\/td>\n		$25.00<\/td>\n<\/tr>\n
Clothes
\nEnvelope<\/td>\n		$15.00<\/td>\n<\/tr>\n
Vacation
\nEnvelope<\/td>\n		$25.00<\/td>\n<\/tr>\n
Holiday\/Gift
\nEnvelope<\/td>\n		$10.00<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

 <\/p>\n

Typical annual amounts:<\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
Category<\/big><\/td>\nAmount<\/big><\/td>\nProportion<\/big><\/td>\n<\/tr>\n
Food<\/td>\n$6,372<\/td>\n13%<\/td>\n<\/tr>\n
Housing<\/td>\n$16,895<\/td>\n34%<\/td>\n<\/tr>\n
Apparel
\nand Services<\/td>\n		$1,725<\/td>\n4%<\/td>\n<\/tr>\n
Transportation<\/td>\n$7,658<\/td>\n16%<\/td>\n<\/tr>\n
Healthcare<\/td>\n$3,126<\/td>\n6%<\/td>\n<\/tr>\n
Entertainment<\/td>\n$2,693<\/td>\n5%<\/td>\n<\/tr>\n
Personal
\nInsurance and Pensions<\/td>\n		$5,471<\/td>\n11%<\/td>\n<\/tr>\n
Other<\/td>\n$5,127<\/td>\n10%<\/td>\n<\/tr>\n
Total<\/td>\n$49,067<\/td>\n99%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

A Word About Inflation<\/strong><\/h3>\n
\"inflation<\/a>
inflation reduces value of money<\/figcaption><\/figure>\n

I am sure you have heard of\u00a0inflation. What is inflation? In simple terms it is the rate at which\u00a0money is losing its value or the rate at which prices of goods\u00a0and services are increasing on average. \u00a0If you live in an\u00a0inflationary economy or in other words an economy with high\u00a0inflation\u00a0then adjusting your budgeted amounts to make provision for this is a\u00a0must. Most developed countries have relatively low inflation so you\u00a0don’t have to worry if you live in the developed world. In 2016 end of\u00a0year inflation for the United States \u00a0is projected to be about\u00a00.9%. This is a relatively low figure.<\/span><\/p>\n

 <\/p>\n

To put it another\u00a0way\u00a0with\u00a0inflation you would have to put up more money in the future to buy\u00a0the same quantity of goods you bought today. Boachsoft Finance 2012\u00a0provides you with a tool to find out the amount of money you would have\u00a0to put up to buy the same quantity of goods in future. This is the inflation\u00a0calculator. Select the inflation calculator on the tools menu to use it.<\/p>\n

 <\/p>\n

Adjusting\u00a0a budgeted figure to make provision for inflation isn’t difficult. Just\u00a0add 1 to \u00a0the forecasted inflation rate \u00a0and multiply it by\u00a0the annual budgeted amounts. \u00a0For example to adjust the budgeted\u00a0annual figure for food which from one of our tables \u00a0is $6,372 we\u00a0would \u00a0carry out the calculation below:<\/p>\n

 <\/p>\n

(1 + 0.9%) * $6,372<\/p>\n

(1 + 0.009) * $6,372 = \u00a0$6429.35<\/p>\n

 <\/p>\n

Conclusion<\/strong><\/h3>\n

I\u00a0am sure you would now be more comfortable when creating your next\u00a0budget. The data provided above\u00a0and the tools we talked about\u00a0should make the work easier. Personal budgets help keep personal\u00a0finances on track. Using personal finance software like Boachsoft\u00a0Finance 2012 is definitely the best way to go about it.<\/p>\n

 <\/p>\n

\n

Boachsoft \u00a0LowRider 2016 is an excellent work order<\/a> and repair shop management software<\/a>.<\/p>\n

\n

Credit: Yaw Boakye-Yiadom – Boachsoft Founder and Sole Proprietor.<\/p>\n

 <\/p>\n

\"Boachsoft<\/a>
Boachsoft Founder and CEO Yaw Boakye-Yiadom<\/figcaption><\/figure>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Home Budgeting Many people have difficulty creating home budgets. Where do I\u00a0start?\u00a0How do I go about it? How does inflation affect the home budget? These are some of the questions they ask….<\/p>\n","protected":false},"author":1,"featured_media":249,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[32,36,51,73,106,111,141,151,153,219],"_links":{"self":[{"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=\/wp\/v2\/posts\/245"}],"collection":[{"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=245"}],"version-history":[{"count":0,"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=\/wp\/v2\/posts\/245\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=\/"}],"wp:attachment":[{"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=245"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=245"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.boachsoft.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=245"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}