“A budget isn’t about limiting yourself – it’s about making the things that excite you possible.”
Budgeting refers to the act or process of creating a plan to spend your money. This spending plan is called a budget.
A budget is a spending plan based on income and expenses. It’s an estimate of how much money you’ll make and spend over a certain period of time, such as a month or year.
Budgeting can involve making a comprehensive list of expenditures or focusing on a few categories. Some people prefer to write their budget out by hand. Some others use a spreadsheet, some even use budgeting apps. There’s no correct way to budget — what works for one person might not work for another.
“I want to get two books for $20 says Gbemi a high school student. With $20 in his hands he sets off for the bookstore and on getting there, realized he had to get a pen too for $5. There was little he could do than go back home with only the books”.
We are like Gbemi when we don’t create a plan to plan, save and spend our money/resources in a justified way.
SIX (6) REASONS WHY YOU SHOULD CREATE A BUDGET?
Budgeting Stops Overspending
Mapping out expenses in advance reduces the risk of overspending and can help out in paying debts you already have. The stress of finding a way to pay for your everyday needs can be astronomical when most of your paycheck is already spoken for.
Helps You Achieve Your Goals
With a budget, you can direct your resources toward the things that are most essential to you. The 50/30/20 budgeting guideline is one technique financial gurus propose when attempting to accomplish a financial objective. This technique divides your budget into three categories: necessities, wants, and financial objectives.
Savings made Easier
According to America Saves, persons who do not have a budget save less money than those who do. This is due to the fact that when you budget, you allocate your money to specific purposes.
Makes More Room for the “Fun” Stuff
You love clubbing? Buying video games weekly? Upgrading your wardrobe? Budgeting isn’t about restricting your enjoyment; it’s about creating new possibilities to have more fun.
Budgeting may be flexible, in that you may circulate cash among categories as wished for the duration of the month. It includes all ways of controlling yourself from overspending. It additionally lets you better understand the problems inside your spending. With a budget, you no need to spend greater than your means. Generally, you ought to limit yourself from touching the cash you’ve got set apart for savings, however, you may regulate the quantity you spend on every different category as you go.
Puts You in Control
Creating a budget allows you an advantage/ a sense of manipulation of your money. It lets you prioritize your spending, measure how you’re doing, and recognize where you want to make changes.
A budget places a strong plan into location that is simple to observe and offers you the danger to plot and put together for the future.