Personal Budget

Personal budget could be described as a form of financial plan. It is normally made by individuals in order to address the various financial needs they might be having. The personal budget plans are extremely useful in the context of personal finance.

Areas of Personal Budget
The personal budget plans are used by individuals in order to look after the following areas:
Repayment of Debt
The personal budget plans of different individuals are separate from one another. However, there are certain common categories that are considered when formulating a personal budget plan:
Refreshment and Amusement

Devices of Personal Budget
The tools and devices that help one to make a perfect personal budget plan include the following:

Spending management software
Manual means like paper and pencil
Money management software like You Need a Budget, Quicken, Mvelopes and Microsoft Money
Spreadsheet software like Microsoft Excel, Calc and iWork Numbers for example

Important Concepts of Personal Budget
While making a personal budget some important notions have to be kept in mind. The following concepts help one to make a personal budget plan that is effective:

Making budgets for inconsistent income
Purpose of the budget
Making it flexible
Maintaining simplicity
The individual who is making the personal budget should be clear about his priorities. He should know what he wants to achieve by making the budget as that enables him to make an efficient budget. In order to make sure that the budget works it has to be kept as simple as possible.
Guidelines of Allocation for Personal Budget
One of the most important factors of personal budget is proper distribution of the financial resources. There are different guidelines that have been developed for this purpose by financial services providers:

Housing as 25% of spendable income
The 60% Solution

Following the Personal Budget
Keeping track of the budget after it has been made is an important task. There are several methods that have been developed for this purpose:

Spreadsheet budgeting with date-shifting
Envelope Accounting


More Information Related to Finance Theory
Finance Concepts Debt Interest Rate
Public Finance Mortgage Loan Discount
Long Terms Financing Yield Curve Arbitrage
Finance Services Company Arbitrage Pricing Credit Derivative
Binomial Options Pricing Model Capital Asset Pricing Model Cox Ingersoll Ross Model
Black Model Black Scholes Model Chen Model
Liquidity Risk Commodity Risk Consumer Credit Risk
Systemic Risk Currency Risk Market Risk
Interest Rate Risk Settlement Risk Equity Risk
Gordon Model Monte Carlo Option Model Ho Lee Model
Rendleman Bartter Model Vasicek Model Hull White Model
Rational Choice Theory Modern Portfolio Theory Cumulative Prospect Theory
Efficient Market Hypothesis Arrow Debreu Model International Fisher Effect
Floating Currency Financial Risk Management Hyperbolic Discounting
Personal Budget Floating Exchange Rate Discount Rate

Last Updated on : 1st July 2013

This website is up for sale at $20,000.00. Please contact 9811053538 for further details.