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This article greatly deals with the definite advantages of having a budget to live with, a subject that have covered rarely in this blog. I’m asked quite a bit about what the benefits of creating a personal budget are. One of the reasons to this article is, I have found most of the people not have any budget and run out of money at the end of each month. Such people do not have any control over their money and such situation later put them to trouble like huge debts, uncontrollable expenses, no savings and running out of money when necessities approaches. Getting aware on the advantages of personal or family budgeting would help to live within and get right control over our income and expenses.
As an introduction, budgeting considers as the first step to the financial planning. It also considers as the initial step to various financial goals like become debt free, make investments for future goals, retirements planning etc. Budgeting is not limited to any individual, but anyone, whether it is an individual, family, group or organization, who wants to get control over their finance, should practice and enjoy the power.
Creating a monthly budget is of course not a difficult task. With little dedication and disciplined approach, anyone can create and live within a good budget for self and family. One of the important budgeting activities is timely recording of the expenses and income. Moreover that, living on a budget is that it relieves a great deal of financially related stress.
Here is the most powerful advantages of having your personal budget:
1. Through budgeting, individuals get full control over their money. At the end of each month, budget would tell you where the expenditure happened each time.2. Budget would be helpful to identify the areas where unnecessary spending happened. This would help to avoid such spending in the future and save money.3. Budgeting is great to allocate money for rotating monthly expenses and which ensure nothing have missed such as utility bill payments, insurance premium, loan EMI etc… A great way to save money that may go as interests or penalties if a budget is not in place.4. Tracking of daily expenses is a part of budgeting. While tracking expenses, one can easily identify any unexpected, but necessary expenses happened in each month. Once have an idea on this, one can easily create an emergency fund to tackle and control such emergencies without using a penny from the budget amount.5. Proper budgeting eliminates the requirements of approaching third person to get any advice on your money. Your record gives you a clear picture of your cash flow in each item.
6. Budgeting helps to identify the possibilities of saving money by avoiding unwanted and unnecessary expenditures.
7. Budgeting is an excellent method to track and identify the right and unnecessary expenses of each family member and self.8. Personal budgeting habit improves individual money management efficiency and enhances spending discipline.9. Budget would enhance saving habits, reduce debts and unnecessary money borrowing habits.10. Budgeting would enhance the thinking power to identify the difference between ‘want’ and ‘need’. This would help save more money by avoiding what really not required.If executed properly a budget will allow a person to simultaneously meet their expenses, place money into savings, pay back outstanding debt and plan their finance to a great extend.