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Financial success doesn't come by accident. It's achieved by the creation and commitment to a financial "order" in addition to a clear growth strategy.
Order is the first law of increase.But achieving financial "order" in your business or personal life doesn't happen by coincidence, it is an intentional journey. It's your daily walk with money that determines your financial future. A consistent great decisions regarding your money ultimately creates a great financial future either for an individual or an enterprise. Decision determines destiny they say.
What is a budget?
A budget is a spending plan with a clear proposal on how to meet it with resources. A person, a group of people, a business, a government, or just about anything else that makes and spends money can have a budget.
Success generally is a product of consistency in doing the right thing. Budget is a good way to make that consistent sound financial decisions. A lot of individuals and businesses suffer a miserable financial experience not because of the absence of income but the absence of budget in their operations. They simply run a life of "anything goes'. Living a life that is centred on the principle of budgeting will save you a lot of undue financial pressure. What exactly does one stand to miss if you don't budget? One way to know this is to consider the the benefits of
Powerful benefits of a budget?
1) Budget puts you in control of your money.
2) It helps you keep track of your expenditure
3) Budget helps you eliminate waste.
4) It helps you overcome impulsive buying and unhealthy financial commitment
5) Budget helps you identify and leverage on investment opportunities.
6) Helps you maintain a healthy and balanced finances.
7) Makes you a wise and disciplined spender.
8) Helps in Identifying your spending priorities
It's only proper that after talking about the benefits of budget to also mention how a budget can be done effectively.
How to budget effectively?
There are lots of expert advice on how to budget effectively. But the " 50:30: 20" principle is highly recommendable if you desire a great spending plan when budgeting. It's quite easy to understand and apply. It recommends making your spending plans with the following order:
50% on your needs
Your needs are different from your wants. Needs are things you can't do without. Examples of needs are food,transport, and bills.
30% on your your wants
Your wants are the things that basically bring you an additional pleasure,The things that you desire not because you can't do without them but you go for them just for the purpose of the luxury, feeling or leisure they offer could be categorized as wants. Fragrances,outings,holidays and additional phone are some examples of wants.
20% for savings
Being wealthy is not about how much you earn or spend but about about how much you retain. Savings refers to what you set aside for future purposes. This includes cash savings, investment, and retirements.
Those and more are what you miss if you don't budget. In conclusion, it is of particular importance that one comes to terms with the fact that a good budget could be quite mentally tasking. But the benefits of budget far outweigh the pains associated with practicing it. Start budgeting today.
