How to Budget Your Money

How to Budget Your Money

2019/03/14

We all dreams to have the best of relations with money, but alas, most of us find trouble in managing their relationship with money. Then only we look for someone to patch up these bad relations and there comes the idea of having money on credit and we fall in traps of Debts. But, trust me there are still better ways to patch up those relations, simply by means of Budgeting our finances. Yes, you read it correctly; indeed, Budgeting is an exercise we all need to manage our good relations with money at all times.

In simple word budget is a plan for how you intend to spend your money every month. Out of our earnings, how much you will invest or how much to contribute to savings or so on. It helps us to live within our means. Hence, we firstly need to compare our current total monthly income to our current total spending. Having done that, we need to reduce our spending as necessary so that it comes lesser than our total income. Once done with it we need to allocate our resources judiciously so that we are able to pay off our all living expenses and debts, if any.

The budget is just a plan hence the success is by means of implementation of the same and adherence to its objectives. It’s always good idea to place some money in the name of contingencies, as for example the gas price may increase, your kid’s tuition fee may be increasing next month, and the worst your income may be decreasing. Having prepared for the worst in your good times provides you the necessary potential cushion to bear its impact. Think of these unplanned contingencies, if you are facing them without budgeting, we surely will restore to credit card advances, borrowing money, paying bills late or not paying bills at all, in other words driving ourselves deeper and deeper into debt.

On the long run, having budget you expenses do help you in making your financial dreams come true; without getting you trapped in the jaws of debt. It allows you to purchase big ticket items with minimum use of credit. Make you ready to face the unexpected, by means of making you self sufficient.

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