Back To Article Index
Money Budgeting - The Key to Financial Success
Money budgeting is an extremely important element in every financial success story. Ignore it at your own peril.
Money budgeting vital for financial success
One should learn the art of money budgeting if one wants to succeed financially in life. In the absence of money budgeting, chances are that you will land into dangerous debt traps without knowing how to come out of it. This is because most people tend to spend more than they earn without even realizing it. Money budgeting, if done properly, can check this tendency which is widespread in this era of easy credit with the use of various kinds of credit cards. Money budgeting can help you to control your finances and prevent you from getting into serious financial trouble.
Effective money budgeting
To begin with, you should list incoming money over a period of time, say on a weekly, monthly or fortnightly basis, and then list the outgoing money, like mortgage payments, credit card bills etc. You should also keep a close watch on how your budget is performing and if necessary, change it to account for unforeseen problems without overspending. Divide your expenses into categories like housing, living, work, personal etc. and find out how much is being spent on each category and what can be cut down to improve the existing financial condition. If you had begun to treat luxury items as essentials, you can now save a lot of money by weeding them out of your budget. Money budgeting will help you achieve this objective by pointing out how much you actually spend on such items. Money budgeting should always factor in a contingency fund – say, about 10 percent of your income - that can be used in emergency situations such as when you lose your job or have an unforeseen expense. This fund should, however, be used only in emergencies.
Money budgeting is not as tough as it seems at first, and is one of the best ways to give you the things that you want and ensure for you a stable financial future.