Sound budgeting keeps you from being in such a situation and makes you one step closer to having control over your finances. Worse, it would sometimes cause them years of friendship. I would often come across posts on Facebook of some friends stressing over people who are hard to pay back the money that they owe. We don’t realize it but what stresses us out the most is money especially the lack of it. Gives You Peace Of Mind & Control Over Your Finances This prevents you from impulsive buying and encourages you to spend within your means. Having a sound budget stops you from getting into this kind of trouble as you will have a clear understanding of how much cash or credit you have left after all the necessities. Our random Amazon or Shopee finds may seem like a good bargain at first but when our budget falls short and our credit card bill shoots up, we would realize they’re no cheap finds at all. Notice how your small spendings like that daily cup of Starbucks coffee or thrice a week Chinese takeaway can surprisingly become big when summed up? We are often fooled into buying stuff we don’t actually need just because they are cheap. Keeps You Away From Unnecessary Spending You can read many resources online if you wish to learn more about budgeting and how you can make it work and use it to your benefit. I usually have an excel file of my projected budget for a 6-month period that gives me a rough estimate as to when I will have funds for non-essentials. Sticking to it is what makes the most difference. One thing to bear in mind though is that sound budgeting is just the start. Things like putting off booking a plane ticket or buying a new pair of shoes for later to add on your emergency funds or catch up on your credit cards. When you make a safe estimate of how much you would have come to the next payday, it allows you to picture your current financial situation which can lead to better choices when it comes to handling your finances. A sound budget prevents just that from happening. This often leaves us having to borrow money to pay rent and buy food in the end. Admit it or not but most of us already have a ton of things in mind we want to spend our money on even before seeing our paycheck. Most people end up in debt because they spend more than what they make deliberately. Knowing how much you make and how much money you would have for a given period helps you with putting more on your savings while paying off debts and taking care of your necessities. There are many ways you can approach sound budgeting and it depends on what you deem more important in your situation. Of course, this may not apply to people who are still trying to pay off debts as bringing what you owe to zero should come first but this doesn’t mean not putting anything on savings. I save for emergencies, travel, future investments, and sudden unemployment. Savings is always on top of my list and what’s left of my budget is allotted to daily spending and other things.
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In this blog, let me share with you the 5 reasons why you need a sound budget.
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This is widely practiced by government offices and business establishments but should also work for personal use. Defined as an estimate, often itemized, of expected income and expenses for a given period in the future. There are many tested budgeting methods you can try. They usually take budgeting for granted and end up putting themselves in a hole they hardly can get out of. The same goes for people who are bad with it. Most people with good financial standing are doing well effortlessly not because they earn more but because they budget really well. Budgeting is one of the basic skills any person should master.