Budget is an estimated revenue and expenses over a specified time. It is evaluated and forecasted on a periodic basis. A budget can be made for a person, family, group of people, business, organization, government or anything else that makes and spends money.
Why is Budgeting Important?
•Budgeting helps you reach your goals
You’ll be able to prioritize the things that are most important to you. This may be finishing college, investing for a business, house, family, etc.
•Budgeting helps you save money
When you budget your income, you forecast your spending which helps you prioritize the most important payable for the period. It is advised that you deduct your savings first before your payables.
•Budgeting helps you stop overspending
It limits you to spend money on things that are less important or unnecessary. You focus on limiting and decreasing your spending limit. You also eliminate unnecessary expenses like uber, gym, cable tv, etc.
•Budgeting keeps your mind healthy
Once you forecast and categorize your spending, you become wise. You prevent your self from worrying about future problems. You become prepared for things that are scheduled and not. You have a budget for an emergency and you have a savings or investment for your future.
•Budgeting increases your mental sharpness
Budgeting helps you become flexible. You’ll be able to forecast, prioritize, categorize or even limit your budget. It helps you think how to decrease each payable. Like electricity bill, you switch off or unplug electronic devices or anything that uses electricity when not being used.
•Budgeting helps you create a better future
Budgeting helps you control your money. It helps you decrease your spending and increase your savings. You limit your spending on things you don’t need. It helps save and invest for your future.
Budgeting is very simple. You can do it by getting the percentages of your income to cover your expenses, savings, and bills. You simply track the money that you spend by categorizing, listing and prioritizing. You may decide to switch. minimize, limit, increase or decrease each category depending on your income.