Why we should prepare Personal Budget

A budget is a statement or a schedule of how our future income will be spent. A budget must be a positive, pro-active tool that frees us to accomplish our goals and look forward financially. Everyone who wants to live a life of financial freedom must prepare and stick to a budget. A budget helps us • organize our finances • control our spending • begin saving money consistently • start getting out of debt! • stop overspending before it happens. In budgeting, we look forward more than backward; we emphasize the "big picture" A budget must be able to give you an instant picture of the balance in your bank account - plus what the money in the account is for. A Budget therefore protects you from inadvertently spending money that is being saved for a special budget purpose on the wrong item (for example spending the money for your child’s school fees on household electronic item!) this can also be described as impulse buying. In spite of the advantages of a budget, it would not work without the financial discipline of the preparer or owner. Strategies in setting up a budget • The first significant step is to change your thinking about money, shift your attitude toward spending, actually focus on saving money, planning ahead and driving for success • Develop a greater awareness of how you earn, manage, save and spend money • Awareness of how others would lure, entice and want you to spend your money (advertisers, retailers, and manufacturers) • To stop participating and playing the “Keeping-up-with-the-Jones’s game,” living with a false sense of wealth and security, while over-extending your self and financial resources, beyond your means. Do not envy others and lust after things that they might have or even worse, get deeper into debt to compete or keep up appearances. It is counterproductive and can ruin lives! • Delay purchases – learn and do, sometimes without having to buy! • Set solid financial and budget goals for yourself and your family that you can work on individually and collectively to achieve together • Set spending limits and stick to them • Do not make ends meet utilizing credit cards or visiting the ATM or cheating on your budget • Understand your income – know where the money is coming from and how it varies throughout a one-year cycle • Understand your expenses – monthly and irregular, unexpected expenses • Set a few realistic financial goals • Know your own habits - spending, temptation- and where the areas of risk and exposure are. • Set up savings and spending mechanisms that work, savings and investment accounts and have the right number of credit cards • Make an income plan – detail is important • Plan your obligations and must pays – bills, tithes etc • Plan your necessities and look for ways to economize • Set aside pocket money for daily incidentals • Create a family allowance to cover entertainment • Create a personal allowance • Live happily on a budget • Welcome to frugal living mode! Cutting back on living expenses – alternatives for simple living • re-examine why you work and how you live • stop tossing your hard-earned cash away • shopping, overwork, stress and debt (some refer to this as an illness quipped: ‘Affluenza’!) • celebrate when you have money left over at the end of the month – indulge a little and reward yourself – rewarding patience and persistence! Not just the doing good and sticking with it We do it right when we apply wisdom (best choices and decisions), discipline (sticking to it), honesty (no cheating), persistence and celebration. At the end of everything, please remember to donate to Charity/ credit: The Internet