Let me ask you a couple of very easy questions.
What’s your take on personal financial management?
Is it important for you?
Well for almost all of us personal financial management is important. We know this. But the irony of this fact is that hardly few of us take up to the task of managing our finances. For one reason or the other we tend to ignore it.
One major reason for this has been that we do not know from where to start.
We miss the starting point of the whole game of managing our finances.
Actually the key to start managing your personal financial life is to start Budgeting. The road to personal financial freedom and financial well-being starts with Budgeting.
Budgeting makes you spend less and save more. With Budgeting you get to enjoy life, save money and manage your personal finances in a much smarter way. Implementing Budgeting in your own life successfully will open the doors of happiness for you.
So today we present you more than one reason which would motivate you and make you aware of the Importance of Budgeting so that you can take up and implement Budgeting in your own life too.
Let’s have a look at the importance of Budgeting to realize its multiple benefits.
Budgeting Keeps a Check on Your Spending
One of the major goals of preparing a budget has been to exactly know where and how much you are spending. There are expenses which are absolutely unnecessary and there are areas where you overspend or do excess expenses. By Budgeting you get to know both of these very easily. For example, suppose you spend $100 on Entertainment each month. Now you can easily reduce this expenditure by $50 every year. As such Budgeting can help you to keep a check on your spending.
Budgeting as a Guiding Star
I am sure you must have set goals in your life. Some of your goals require you to be financially capable in order to meet them. Suppose you are planning to buy a car this year. So invariably you require setting aside some portion of your funds to this head. Here Budgeting can act as a guiding star to let you know how much you are prepared to meet your goals. You can then take corrective action or improve your financial strategy to achieve them in the time frame that you have set.
Budgeting makes you live within Your Means
With a Budget in place you come to know how much is your total earnings and how much you are spending in a month. You exactly know where you would be spending and never go beyond the limit. So Budgeting makes you live within Your Means.
Budgeting lets you Save Money
Budgeting is a great way to start saving money. With an eye on saving money you can plan your expenses accordingly. Apart from the necessary expenses such as utility bills, insurance premiums, loan repayments, children’s education fees; you can very well control other expenses to save money. You can re-plan and prepare a budget accordingly.
Budgeting makes You Debt free
Budgeting is done invariably to keep your earnings in excess of your expenses. As you control your expenses you do not spend in excess of your earnings. So you do not need to borrow money. Thus Budgeting makes You live Debt free.
Budgeting makes you meet Financial Emergencies
Financial Emergencies can arise at any time. Medical bills, Car repair are some examples of Financial Emergencies. They require a lot of fund. Budgeting helps you to be prepared so that you meet any sort of Financial Emergency. So when you prepare a budget, make a head of Financial Emergencies and put aside adequate funds in it month on month. This way you can build on the Emergency Fund and thus you can successfully meet Financial Emergencies.
So the above points aptly bring out the Importance of Budgeting and show its varied benefits too. You would be surely motivated to start preparing a budget so that you can manage your personal finances and be successful in leading a happy and prosperous life.