Categories: Personal Finance

Budgeting 101- Learning the Essentials

Have you ever been into a supermarket and knew you aren’t supposed to buy something but end up buying it? Well, then you need to have a budgeting plan with you to save you some trouble. Nobody likes budgeting, I know. But neither any of us likes to spend all of our money and remain empty-handed until our next paycheck. That is why budgeting is necessary. People may consider budgeting to be difficult to do but with the right knowledge and guidance, it is easier than you think. Here is some self directed ira custodian from Personal Income for making you more aware for your future plans.

Budgeting

For making your life easy, following are the essentials of budgeting:

Know exactly your cash inflow and outflow

To assign your income, you first must be fully aware of where it is coming from, and where it is going to.

You may be a new earner, or you may have been earning for a while, knowing your cash flow should be the first and foremost thing to figure out.

Set your goals

You do not have to be a budget wizard to set what your goals should be, and here is how you can set your goals.

Know how much you can spend

To set your goals, you must know how much is it there to be spending on your necessities that are your food, utility bills, gas, rent and stuff like this. But do not stop there; plan ahead of the amount you are going to spend on your luxuries too because here is where you will spend recklessly if there is no proper planning. So list down how many times are you planning to dine out!

You can also read: How to have a Smarter Spending Plan.

Know how much you should be saving

To set your goals, it is vital to leave a window open for saving. You must be fully prepared for the times to come ahead because loans are not the priority for many of us, this saving would count as an emergency saving

And in case you are planning to invest in something big something fancy, like a car or a house per se then you need to save for it separately. Do not mix it with your emergency saving.

Also Read: How to Improve Your Money Mindset

Stick to the plan

No matter if you are up all night and craving for a pizza or a hamburger, stick to your plan! Because why did you bother yourself all weekend planning up if you were not even planning to hold to it.

In case of need, of course, you are supposed to spend but be very careful about what you are saying a need.

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Related content: Effective personal finance tips resources

Repeat

When you are done with figuring out how much money you earn and how much you spend and then came to know how much you should actually pay and save, you can quickly set a goal. But setting a goal is not anything until you stick to it. After sticking to it you can see changes in your finance, you can know whether the plan was up to the mark or not. If not, then make amendments but if yes then repeat it. If necessary, make changes once in a while.

Author Bio: Sarah Smith has been a personal finance author for the last five years. She is also an independent and very passionate finance and investment advisor. She regularly posts at www.personalincome.org.

John Mulindi

John writes on a variety of topics. He blogs on topics ranging from social media marketing (SMM), search engine optimization (SEO), search engine marketing (SEM), email marketing, business, personal finance tech, entrepreneurship to personal development. In free time he likes watching football, reading, listening to music and taking nature walks.

View Comments

  • What a helpful and useful guide on the importance of budgeting and how to actually start doing it! As someone who is a big advocate and supporter of Dave Ramsey, I can honestly say that budgeting and being mindful of our spending has been a great asset to our marriage and well-being.

  • Great tips! I love your straightforward and no nonsense approach! I’ll definitely be incorporating these tips starting today!

  • Thanks for sharing, im more of a complusive shopper so I always end up broke because I did not budget what to buy.
    Will follow your tips

  • Budget is an important part of life and business, it is good you have describe in simple way by following the income and expenses.

  • Visiting from Thoughtful Thursday. LINK UP. Good, helpful advice for anyone needing help sewith budgeting. Thanks for sharing!

  • Great piece! Offers a clear direction to people who want to achieve their budgeting goals. Thanks for sharing.

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