Your mum swears by it – she’s almost starry eyed about this super-hot problem solver when it comes to her money dilemmas. Before your mind goes on overdrive wondering who this mystery being is, relax! We’re talking about budgeting.
There are, in essence, three big reasons why it makes sense to appease the budgeting muse and follow her path religiously: – It tells you how much you need. Total up all your fixed outgoing expenses for every month, such as rent, loan EMIs, insurance premiums, children’s school fees, salaries for household help, etc.
Then, add the average cost of fluctuating monthly expenses like utility and phone bills, groceries, and fuel, as well as a buffer for emergencies. Voila! You’ve miraculously arrived at the minimum amount you need to earn, whether from a job or investment income. – It keeps you from overspending. When you know how much you need for the essentials and have set a budget to account for your monthly expenses, you’re less likely to spend too much on impulse purchases.
Every time you’re tempted to buy something you don’t really need, the awareness of your financial limits will slap your hand reaching out for your wallet. Financial planning also allows you to weed out expenses from your budget that don’t yield value for the amount you part with. – It helps you plan your finances. Spending, investing, earning and saving don’t have to be at odds.
A budget can help you balance these basic aspects of financial planning for better control, and to set yourself real ambitions in life. Budgeting will help you create an effective strategy for saving as well as investing your money, allowing it to grow more within a shorter time-frame. Remember, understanding all the sources of your income, and every avenue of your outgoing funds is essential to achieving monetary peace.
There are many other reasons why you need to start budgeting right away. Create an emergency fund for unexpected eventualities, make a significant purchase (such as a house or car); live each day like a princess, and achieve your retirement goals like a queen, a well-structured budget can help you do it all. Waste no more time with a play-it-by-ear approach. Use the superpower of budgeting and take control of your finances today!
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