Knowing how to do personal budgeting is essential if you are aspiring to have financial freedom. You have to take matters into your own hands today.
Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. The people who take their financial matters seriously, they become in control of their life.
Budgeting only works if you are truthful about your expenses and income. To make an effective budget, you must be willing to work a detailed and accurate of your current financial picture.
It might be overwhelming at first but as you consistently work and track your progress, it will become easy and you'll feel a sense of personal achievement. You have to take this seriously and be dedicated until you reached your goal.
Because if you don't and do nothing about your finances, you will be in the same situation until you retire. If you are having a tough process in your budget, ask for help from your financial advisor or a financial planner.
Budgeting is not fun at all, not many people enjoy sitting down and balancing their budget. But the great news is whilst not fun it's worth it! If you are having a tough process in your budget, ask for help from your financial advisor or a financial planner.
Why is personal budgeting important?
Personal Budgeting helps you to plan for a better future. Instead of scrambling when it's time to pay for something, you'll have all the cash you need.
You will see where you're monthly income goes. Without tracking your spending you will end up being broke which might cause missed bill payments.
Helps You Stop Worrying and Enjoy Your Money More when you know where your money goes, you will be able to predict if your financial goal is achievable.
This is like a roadmap of your financial goal without a plan, a road map, you'll be lost.
4 Reasons To Start Thinking About Personal Savings
Do you feel jealous of those who have personal savings? Have you experienced using credit cards on unexpected expenses because you don’t have emergency funds? If you lose your job today or tomorrow, would have enough saved to cover your living expenses?
You probably want a savings account but unable to do so because you don’t know when and how to begin. May you have tried in the past but failed because there’s seems nothing left after payday?
Many financial experts and financial planners recommend having a savings account for rainy days. So how do you start? Heres’ some tips for making saving money a part of your personal budget.
1. Get Your Money Working For You- Pay Yourself First
Many people felt they can’t afford to save money because there seems not enough left over to save after all the bills have been paid. What if you do the reverse?
Every payday make it a habit to put money in your savings account first, and then tackled your monthly expenses with the leftover?
Doing it by percentage might help, let say 10%, of your income. This is not written in stone but you have to start an amount to which you’re comfortable with. This will teach you subconsciously that a $1000 check is actually a $900 only.
2. What To Do With a Windfall of Money
Have you ever think or some have ask you how will you spend the extra money?
It could be a stash of cash you’ve received from a tax return, a gift, or bonus from work, or in other ways, you get money above and over your usual income.
Here’s a tip, do nothing and don’t spend your windfall! But instead, put it in your savings account and use it as needed.
Unless you have an emergency need for it right away. Making a habit of putting your windfall of money in a bank is an awesome way to begin your savings. But this requires great disciple and focus especially if this money comes from your bonus.
3. Reviewing your budget
Studying your budget is a process of reviewing, adjusting, and fine-tuning the amount of money that’s allocated to your different budgeting list.
This small but very crucial step will reveal your spending habits and will allow you to see areas that need improvement with your budget. You will also see where you can reduce your spending and save more.
Review all the unnecessary things or optional expenditures like dining out, shopping, club membership, entertainment bills and see where you can cut back. Then put that money into savings.
4. Avoid Debt
Start paying off your credit cards monthly so your debt will not pile up.
Stay away from using credit cards until you maxed out instead leave your cards at home so you can avoid going into debt. Once your savings are built up you won’t need to dip into your credit cards with unexpected expenses.
Things You Must Know About Emergency Fund
A lot of people question the importance of an emergency fund. Is it really needed, after all? How do you go about it? What is an emergency fund? Below are some suggestions and ideas that would help answer these questions.
Emergency funds are a