The Blog Of TL Wall Accounting

Archive for March, 2012

The Basics Of Budgeting

Whether you’re in business or you’re worried about your home finances, budgeting can help bring peace of mind to you and help you know where your money is going. It gives you the opportunity to pay bills, save money, and even figure out if you need more money or to control expenses so you can sustain yourself.

Budgeting sounds really hard and boring to most people, which is probably why they don’t do it. If you have a lot of debt you probably don’t want to know about it, but you can’t address your issues without knowledge; that goes for everything in life. Budgeting isn’t hard, although there are aspects of it that can be complicated. We’re going to give you the easiest way to go about it, which is a great start.

The first thing to do is determine how much money you bring home a month. If you get paid weekly take 4 pay stubs, add them together, and that’s how much you bring home. If you get paid every 2 weeks take 2 stubs and add those together and you’ll get your answer. If you’re a business you might want to use a 3-month calculation if your revenue is pretty close on a yearly basis.

Something for you to think about if we’re talking personal income, and this should make you happy. If you base your estimated bring home income on every 2 weeks then you actually get paid 2 times more than what we’re budgeting for; weekly, 4 times. For now we’ll consider this extra money and not part of the budget; we can always bring that back into play if needed.

Next you need to calculate all of your expenses. If you’ve already paid bills and thrown your stubs away, you can use your checking account to see what you’ve already paid. Log every minimum payment you make every month onto a sheet of paper. If the amount changes, such as your monthly utility bill, take an estimate of what your average is and write that down. You’ll also have to estimate how much gas you put in your car and how much you spend monthly on food.

Total up all of your expenses for one month, and then compare it to your bring home income. Hopefully what you’re bringing home is higher than what your monthly bills are. If not, you now know you’re in some serious financial trouble and need to determine if there are things you can reduce to bring yourself back in line. Maybe cut out a service you get through cable, or determine to set a food budget and stick to it, skipping paying for lunch every day at work. Don’t panic yet; there’s always something that can be done to help bring you back into alignment.

If you’re bringing home more than your bills, congratulate yourself and then start planning how you’re going to use the extra money you have. Financial experts will say that you should put away 10% of your money for a rainy day, which always sounds good but may not always be practical. Instead, think about taking maybe 5% and putting it away somewhere, maybe a cash jar or a savings account. The idea is to start building up emergency money in case you need something in particular, such as new tires or a new refrigerator. Things break when we least expect them to and often aren’t financially ready for.

If you’re in trouble and you can’t figure things out, that’s when you might need to go to someone for help. If you have problems because of credit cards someone like Consumer Credit Counseling might help. If it’s other problems someone like us can help, since helping people budget their money is one of the things we do. There will be some hard choices to make, some things you might have to live with for awhile that you won’t like, but bringing down debt without getting into trouble that harms your credit report and credit score should be worth it.

Why We Teach Quickbooks

T. L. Wall Accounting helps businesses and individuals learn how to budget and track their money. We offer services where we can do it for them, but often they want to do it for themselves. When people go looking for a solution that will help them track these things on their own, we recommend and teach Quickbooks.

Quickbooks is business accounting software that can also be used for home budgeting. There is a learning curve to it, but most people can learn how to use it in a day or so. It allows you to track income and expenses, categorize them so you know what they are when you run reports, and you can even use it to create checks so you don’t have to go out and buy them from anyone. If you run a large office you can network it so that everyone has access or you can run the program as a standalone.

This is very powerful software. You can generally categorize in 3 categories, depending on whether you want to track bills, revenue or employees. It interacts with Microsoft Excel and Word. You can also print information out in a pdf format, in case you want something that can’t be altered. You can use it to send out invoices. You can use it as a contact management system, as it will interact with Microsoft Outlook as well.

In other words, if you want total control of all the financial aspects of your business or personal life, Quickbooks will get it done. Of course, it all still takes time, but if you want to know what’s going on at a moment’s notice, this program is great to have. And yes, there are tutorials, but if you need help, that’s why we’re here. We provide both group and individual training, customized for your needs.