Making a budget is not an inherent skill, nor is it just a random number that can be used. I have accumulated some experience in budget matters, such as the following.
Two basic principles of budget:
Full coverage. If there is a place that the budget cannot be monitored, it basically means that there is no budget. And don’t forget that the foundation for full budget coverage is full bookkeeping.
No overlap. Don’t overlap between different budgets as much as possible, which increases statistical efficiency and reference. If I have three budgets, but two budgets have overlapping items, many reference indicators of the overall budget lose their meaning.
Several criteria for a good budget:
Goal-oriented, the budget is for financial management and even life goals.
Considering fluctuations, overspending and unexpected large expenditures are normal, and we need a complete system to help us deal with such problems.
Long-term thinking, the essence of the monthly budget is the annual expenditure divided by 12, or even the five-year expenditure divided by 60, rather than a simple monthly expenditure.
In order to implement the principles and standards, the accounting app must meet the following requirements:
-Flexible budget customization
-Budget balance automatically roll over to next period
-Easily transfer quotas between budgets
-Powerful budget report analysis function
Custom budget: budget classification ≠ expenditure classification ≠ account classification, these concepts are easily mixed.
Expenditure classification refers to the categories of clothing, food, housing and transportation expenses; the account classification must correspond to your real account, and the budget is completely different. So we need a powerful custom budget function.
Rollover: We emphasized that the monthly budget is “annual expenditure divided by 12.” Our expenditure cannot be monthly average, and it must be more than surplus. Therefore, the budget function needs to be able to automatically settle the overpayment of the previous period to the next period.
Quota transfer: The ultimate goal of our budget is to control overall expenditure. When a budget has a surplus and another budget is overrun, it can be flexibly deployed through the budget transfer function without having to re-plan the budget.
The budget comes from bookkeeping, which is higher than bookkeeping.
Many people say: “I still have to spend a lot every month after bookkeeping”, the reason is the lack of budget.
But there is no bookkeeping as the data foundation, the budget is a castle in the sky. People who are not accustomed to bookkeeping often habitually ignore many important details when estimating expenses, such as:
Trivial expenses, a single payment is small but the total amount can be large.
Large expenses for mobile phones, computers, home appliances, etc.
Irregular expenses for travel, entertainment, parties, etc.
Unexpected expenses caused by possible life and accidents.
The special feature of Calendar Budget is that it combines bookkeeping and calendar. You can see your daily income and expenses very intuitively, and plan your budget in advance in the calendar.
In addition to IOS and Android apps, this tool also provides a web-end version. As long as you can access the web, you can use this tool to keep accounts and plan your budget.
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