The CEO of Bank of America

Budgeting
Name:
University:
Budgeting
Introduction
Personal budgets are financial plans that allocate income towards savings, expenses, and debt repayment. While creating the budget one considers personal debt and past spending. Financial institutions and many telecommunication corporations have made personal budget templates for easy access such as the Wallet by Microsoft. There are various tools available in the market such as envelope accounting for regular budgeting and spreadsheet budgeting offers a detailed view in twelve months in terms of expenses and income(Fontinelle, 2014).
Personal budgets are essential for successful and long-term financial stability. A budget has various aspects such as showing areas of financial weaknesses. It shows truth about financial habits, areas that people overlook, and points out areas that might need large emergency funds. However, in reality people do not keep personal budgets for various reasons such as not finding them a necessity. They do not bear in mind personal, social, or economic consequences of failing to keep budgets. Nevertheless, in maintaining a certain lifestyle it needs accountability of finances.
Main Body
One major reason for not keeping a personal budget is ignorance. People do not possess the knowledge of keeping successful budget of their finances. People may not know how to construct a budget that would help them stay financially savvy. People might not know basic elements of a budget such as budget balance, allocate funds, or choose priority elements. Excel is an excellent tool for budgeting if people could utilize it(Wreyford, 2013). However, if an individual does not know how to distribute their money such as parting with money for paying bills, filling a gas tank, or transport to work, it becomes a vicious cycle and one lives on meagre wages. This ignorance can deter an individual from the simple knowledge of budgeting.
Another reason for lack of a personal budget is making more money than an individual requires. Therefore, one thinks that he or she does not need a budget because of financial and personal security. These false intonations could lead to financial disaster later in life. Life is unpredictable, emergencies can occur unexpectedly causing an individual to use plenty of money at once or due to economic ups and downs one could be making so much money presently but in the future he or she could make very little. In a short while unemployment or illnesses can severe income. Lack of prior preparations could severe an individual, family, and society.  Ignorance about personal budget also affects the economy because an individual will end up spending on the wrong things and only realize when they could not pay their bills. This could lead to foreclosure of a house or repossessing of cars. Without a budget, one does not know how much they truly have and this affects the economy, the stock market, and interest rates. The government provides social amenities such as schools, hospitals, and public infrastructure. In an economy with less people working or financially stable, the amount of money the government spends and invests affects the fiscal deficit (Ning, 2008).
The extent of the deficit and the money that finances it affects inte...