In effect, they are dollars-and-cents representations of plans for the production of meaningful results during the upcoming year or period of time. A budget keeps track of money coming in and money going out. Most often than not, people pay utility bills and buy luxurious items before they a realization that there is no room to save money for other necessary expenses anymore. You most likely know how much you earned last month, but do you know how much you spent? If you dont, you are not the only one who doesn't. According to survey, most people spend 10% more than they make! Why is it hard to track spending? It is difficult for people to track their spending and whether it is wise or not because they cannot decifer between needs and wants. Anything beyond five years generally is impractical because of the possible change in economy in that time span. There are many benefits of business budgeting. Developing a budget for your business on an annual basis allows you to review the business' overall operations. Budgeting also permits you to identify those factors that are key to the success of the organization. Since the lifeblood of any business is its ability to collect cash and pay bills including the pay checks of its employees, it is important to prepare a forecast of its cash requirements whether for a new or ongoing business. All businesses need to have an idea of future income and costs. This is best tackled by preparing some form of a budget as well as a forecast. Stop thinking about budgeting as a difficult task or a punishment for being an impulsive spender. And stop thinking about it as a financial diet. A budget is simply a tool to increase your consciousness of how and where you spend your money. It is also guideline to help you spend your money on the things that are most important to you. Coupons and sales are helpful in budgeting money. Read the weekly ads from your local stores and spot sales. Non-perishable items on sale can be bought in bulk and stored in your cupboard. For students: It will help you in budgeting money if you can get a job. A job does not only involve earning more money for you to spend outside of the money your parents send you, but it can help you boost your career potentials when you graduate from college.