Manage information

You must manage the information you have into three parts. The third part will be used to create a budget.
1. What is your income:
Collect all types of income, such as: including “net pay” after deducting taxes, commissions, bonuses, social security or pension, disability income guarantee, interest rates, dividends, alimony and others.
2. how much money you spend:
Collect all the fixed expenses and variable expenses is not fixed. Fixed expenses are expenses that were not changed every month, for example, rent, loans, insurance, loan payments, savings, retirement, tuition money  and others. and usually can’t be bothered to sue. Expenditure not fixed variable is spending amounts can vary and can be reduced or eliminated, for example subscription cable television, daily shopping money, gasoline, telephone bill, and others. and can be reduced or eliminated.
3. the amount of the end:
Subtract the total expenditure by total revenue. The result is a reduction in the budget balance. If expenses greater than income, showing unhealthy budget conditions. If the expenditure is less than income, then the remaining amount of the remaining Amount is called “discretionary income”. This is the amount that can be used for emergency purposes or in order to meet the target savings and budget. And it shows a healthy budget conditions.

Step 3: Understand your current financial position

After all the information is collected, you can view the relationship between income and expenditure. You can use the number perspiration when making a budget for the first time, because it takes time to understand your actual financial position. At least this information can give you an idea of shopping behavior is good and true.

Step 4: check the amount of the end

The number of late you have is the difference between your income and the amount of your expenses. These figures give an indication of whether you are spending too much money or not. If the number is positive, you can increase the amount of your savings and if the number is negative, it means you’re spending more money than income.

If you spend more than 15% to 20% of its net income to pay debts and credit cards, chances are you’re in the danger zone. If the final amount is negative, you should re-examine your expenses, especially those that are not fixed, so your shopping habits back in control.

Step 5: write down the expenditure

After you do a calculation of budget stages beginning, start noting the monthly expenses. Even if your final amount is positive, it’s good you understand your spending pattern during this time.

Carry a small notebook to anywhere you go to take down spending and withdrawal of money. Of note is that you do, you could be surprised to find your spending patterns. Many people are realizing that they can spend millions of dollars just to buy snacks, dress or pay the Bills. Usually the problem arising from the purchase of goods is not important, that otherwise no matter not actually purchased anything. The purpose of this registry is to see patterns and the amount of your expenses.

If you feel your finances chaotic turned upside down, try to implement measures to make budget and planning below so you can get back in control of your finances. Maybe you need some time to fix the pattern of spending, but You need to continue to adapt to get financial planning that best suits your financial condition and behavior.

Set the spending isn’t easy, so please include your family in planning this. They can also help your financial arrangements. In addition, the changes you make may affect them too, so they should be involved in the process of making a budget.

To avoid financial problems, we need to build good habits in managing finances. Several ways of managing finances properly is as follows:

Make A Budget

The habit of making a budget is the initial step of managing their finances properly. Financial budget can be a powerful tool to break away from the pile of debt and maintaining the credibility of your credit.

The budget also helps you manage your spending, because it gives information on money coming in, how much money has been issued and the use of the money Budget can provide information about any action that should be performed to manage finances are healthy. The budget can identify spending any less important, so you can allocate funds to other things that are more useful.

TIPS

A budget can help you to:

-Control the financial condition
-Avoid financial problems
-Be smart consumers
-Determine and achieve financial targets
-Planning for the future

Build good habits to avoid problems

One of the most careful though someday could find himself having too much debt. Often the financial crisis happen due to events beyond your control. It is possible that you or other family members lost their jobs or suffered severe pain. But of course the financial crisis could also be caused by spending habits are unhealthy. Whatever the reason, there are many people who have financial problems Indonesia

stages of budgeting:

1. Determine financial goals
To be financially independent, start by determining the financial objectives of short, medium, and long. Ask a number of questions to yourself to help you clarify the objectives financially. What is Your top priority, whatever your needs are, and what is your desire?

2. Collect a variety of personal financial information
The next stage, collect all income and expenditure data. The Data should you collect in between the salary for that already work or allowance from parents, credit card bills, payment of goods which become primary needs, and more.

Then do the classification of data into three parts for the basis to make a budget. The first part, i.e., earnings, earnings from the entire summing these all sources of income. The second part, i.e. the expenditure, expenditure remained as summing these all home mortgage, and spending money on gasoline, variables such as phone, and more. Third is the bottom line, i.e. the difference between the income and expenditures that will give you size does your spending has been excessive.

See Your bottom line, if the difference is positive then you could set aside more funds to save money or raise the amount of payment or credit card debt. If the difference is negative, it means you spend more than income.

“If you spend more than 15-20 per cent of net salary, plus payment of debt or credit card bills, you are on dangerous position. Thorough back your expenses, especially expenditure variables to control spending. Do not get the salary of Rp 5 million but spending a month Rp 7 million, “Hotman said. “If necessary, write down the monthly expenses,” he added.

3. reduce expenses!
Many people are spending money for goods which actually they don’t need, although perhaps she wanted. Therefore, you need to monitor your spending with small notes always bring. These notes will help you recognize the spending habits of each month. Of course you need to discipline records all daily and monthly expenditure in this entry.

Even though the bottom line you are positive, the habit of reducing spending still needs to be applied. Start by bringing food from home and eating in restaurants. Subtract also the habit of drinking coffee and eating at fast food restaurants. “You could save USD $ 5 million per year if the habit of drinking coffee is Rp 20,000 per day could be reduced,” Hotman suggestions. Quit the habit of smoking a pack a day can also save some Rp 1 million per month.

4. make a budget formula
The last stage in drawing up the budget was made formulations. Determine the composition of the budget presentation from your monthly salary. Like what percent you  for savings, the cost of the rent or mortgage, food, clothing, transportation, sightseeing, and more.

You can adopt the composition of the budget as described Ligwina  financial planner on the occasion  is different. Ligwina suggests, the composition of the debt repayments are a maximum of 30 per cent; insurance premium, composition of household, transportation needs, the needs of children and families, as well as health is 20-40 per cent of earnings; the composition of your personal needs like shopping for clothes, grooming salon, or buy a gadget is 20 percent. The rest, about 10-30 per cent, is to be saved as an emergency fund.

Research on financial awareness held Citigroup Asia Pacific or the Citi Fin-Q on 2010 points out, more and more people are realizing the importance of Indonesia’s financial planning. Of the 500 respondents with an average income of $ 10 million per month, is 57 from Indonesia worth 100 points, up from the previous year, 52. Unfortunately, this increased awareness coupled with implementation. Only 47 percent of respondents who obey his monthly budget, while 38 percent of respondents are still in the stage of trying to follow a budget. Jesus Christ, Vice President of Customer Care Center Head of Citibank, said, the first step to be able to have the financial  is making a budget. “Beginning with the budgeting, saving, investing, and sharing. Budgeting is important to help you achieve financial independence, “explains Hotman in Citibank Journalist Class in Jakarta,

Stages of drafting the budget to achieve financial independence begins with determining the financial goals; then collect personal financial information; then reduce spending; and lastly make formulas in the preparation of the budget

Understanding The Budget:

• Glenn a. Welsch defensiveness budget is as follows:

“Profit planning and control may be broadly as defined us systematic and formalized approach for accomplishing the planning, coordinating and control responsibility of management”.
From an understanding of the above, the budget associated with basic functions include the management functions of planning, coordination and oversight. So when the budget is linked the basic functions of management then the budget covers the functions of planning, organizing, directing and supervising every unit and organizational fields in the business entity.

• According to Gomes (1995, p. 87-88), the budget is a document that seeks to reconcile priority-priority programs with income resources projected. Budget combines an announcement of organizational activity or purpose for a period of time determined by information regarding the funds needed for the event or to accomplish those goals.

• According to Mulyadi (2001, p. 488), the budget is a plan of work which is expressed quantitatively measured in monetary units and standards of measurement units to other menvakup a period of one year.

• According to Supriyono (1990, p. 15), budgeting is a financial planning firm which was used as the basis for control (supervision) corporate finance for the period to come.

The budget is a short term plan arranged by plan the long-term activities set in the process of drafting the program. Where the budget drawn up by the management for a period of one year, who later would take the company to the specific conditions of the desired with the specified resource.

Budget Function:
The role of the budget on an enterprise is a great tool to assist management in planning, implementation, coordination, monitoring and also work as a guide in the conduct of the company for the intended purpose.
a.  Planning Function
Planning is one of the management function and this function is one of the functions of management and functioning of this is the basis of the implementation of other management functions.

• Winardi gives the notion of planning are as follows:

“Planning actions include selecting and connecting facts and create and use assumptions about the future in terms of visualization as well as formulating the proposed activities as deemed necessary to achieve desired basil”.
From the above quote before it was concluded that the company commenced operation, the leader of the company should first define what activities will be implemented in the future and the results to be achieved from these activities, as well as how to execute it. The existence of such plans, then the activity will be able to do the job properly.

b. the Surveillance Function
The budget is one way of conducting surveillance within the company. Supervision is the efforts taken in order for the plan which has been drawn up  can be achieved. Thus the supervision is to evaluate the achievements of the work and the corrective actions if necessary. Aspects of oversight namely by comparing between the budgeted, with accomplishments are to be found the efficiency or whether the managers of the executor has worked well in managing the company. The purpose of supervision it is not looking for mistakes, but prevented and imperturbable errors. It often happens that the supervision function of the proposition that debugging subjected to others or as a punishment for a tool dropped the mistakes made on purpose to guarantee the establishment of supervision that the goals and plans of the company.

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  The Function Of Coordination

The coordination function of the alignment of action demanding work of any individual or the inside of the company to achieve a goal. Thus it can be said that the
to create the coordination required good planning, which can show the harmony of the plan between one part with another part. The budget serves as a planning should be able to adjust the plans made for the various sections in the company, so plan an activity that one would be in harmony with the others. For that the budget can be used as a tool for coordination that exists in all parts of the company, because of all the interrelated activities between one part with another part is set up properly.

• Budgets As Working Guidelines

A budget is a plan of work drawn up systematically and expressed in monetary units. Often the preparation of the budget on the basis of past experience and the appraiser estimates in the future, then this can be employment guidelines for each section within the company to run its activities.
The main goal of most of the budget is for outside oversight, namely to limit the overall resources available to an agency and to
prevent spending-spending for things or activities that are not justified by law.

Type of Budget:
1. Budget Ceiling
This type of budget used for surveillance purposes is called the Budget Ceiling. Articles of this type directly supervise an agency with a way of determining the spending limits through the use regulations / administration, or indirectly by way of limiting earnings agencies on known sources and quantities are limited.
2. A Line-Item Budget
This type classifies expenditures by type, are used to monitor the types of expenditure and also the total
3. Performance and Program Budgets
This type is useful for specifying the activities or programs under which funds are used, and thereby assist in its evaluation. By way of separating expenditures by function (such as health or public safety) or by type of expenditure (such as personnel and equipment) or based on sources of income such as property taxes or user fees (user fees), the administrators and lawmakers can get proper reports on financial transactions, to maintain good efficiency to the inside or outside supervision.

The budget is a systematic plan of work prepared and expressed in monetary units. Normally budgeting based on past experience and appraiser-estimated in the future, then this can be a work guidelines for each section within the company to run its activities.
The main purpose of the budget is for external monitoring, which is to limit the overall resources available to an agency and to prevent expenditures for things or activities that are not justified by law.

Benefits Budget:

According to Marconi and Siegel (1983) in Hehanusa (2003, p.406-407) the benefits of the budget are:
1. The budget is the result of the planning process, it means that the budget represents an agreement negotiated between the dominant participants in an organization on the purpose of activities in the future.
2. The budget is an illustration of the priority allocation of resources because it can act as a blueprint for corporate activity.
3. The budget is an internal communication tool that connects the department (division) is one with a department (division) others in the organization as well as with top management.
4. The budget provides information about the actual activities compared to the standards set.
5. Budget as a tool of control that leads management to determine the organization’s strong and weak, this will be directing the management to determine corrective actions to be taken.
6. Budget to influence and motivate managers and employees to work with a consistent, effective and efficient in conditions of fitness for purpose of corporate goals with employee goals.

The budget is one way to conduct surveillance within the company. Supervision is the efforts taken to sebelurnnya plan that has been achieved. Thus, surveillance is to evaluate the work performance and corrective actions if necessary. Aspects of supervision is to compare the performance with budgeted, whether efficiencies can be found or whether the executive managers have worked well in managing the company. Monitoring purposes it is not to find fault but prevention and  errors. It often happens that the oversight function that is mischaracterized find fault with others or as a means of punishment for a mistake made ??in terms of objective oversight to ensure the achievement of the objectives and plans of the company.
Coordination function requires the alignment of the action work of any individual or section within the company to achieve the goal. Thus it can be said that
coordination necessary to create good planning, which can indicate alignment between one part of the plan with other parts. The budget serves as the planning should be able to adjust the plan are made to various sections within the company, so plan activities that will be in harmony with one another. For that budget can be used as a tool for the coordination of all parts that exist within the company, because all the activities that are interrelated between one part with another part is set up properly.