BID TO WEALTH

1. INTRODUCTION
2. DEFINITION
3. BENEFITS OF PERSONAL BUDGET

INTRODUCTION

Personal budgeting is an aspect of finance that cannot be overemphasized if you must achieve a long-term or even short-term financial goal. It helps you to practice basic money management and good financial habits. Having a poor understanding of personal budgeting will affect your financial freedom. Personal budgeting will help you to be intentional in your savings, help you to clear your total debt, give you the ability to plan for your retirement and invest. Certain factors affect personal budgets; including health, career choice, family structure, and age. Several applications, which offer both paid and free options, have been developed to assist individuals with their personal budget because of its importance. In this article I will be sharing with you about personal budget by looking at definitions and benefits. 

DEFINITION

A personal budget is a plan for the coordination of the resources (income) and expenses of an individual. This plan will take into consideration current and estimated income and expenses for a specific period. The period could be monthly, quarterly, semi-annually or yearly.

BENEFITS OF PERSONAL BUDGET

A personal budget is a helpful tool created to fix the resources and expenses of an individual. This plan is like a balancing scale designed to ensure that expenses do not outweigh income in order to help achieve long-term financial goals.

Here are some benefits of a personal budget.

1. OVERSPENDING
   A budget tells us what we can’t afford, but it doesn’t keep us from buying it – William Feather. People live above their income without knowing, hence they go into debt by using credit cards. The abuse of credit cards is because people do not have control over their spending which means they do not reconcile their resources with their expenses. People steal from themselves because they spend on things they don’t need (unnecessary stuff). It is important to note that those who do not keep a personal budget are the same as those who draw out a personal budget but do not stick to it. However, when you draw out your plan and stick to it you will save yourself from overspending, which helps to control your expenses.
2. ACHIEVEMENT OF LONG-TERM GOALS
   Budgeting isn’t just about cutting back on expenses; it’s about aligning our spending with our goals. Being intentional is what makes a champion from ordinary men. Therefore, you must have a foresight of where you are heading and be able to plan and work towards it. It then means you will have to shut your eyes to all the shiny stuff which you don’t need. Whether it’s saving for a dream vacation, paying off student loans, or building an emergency fund, having clear financial goals provides the motivation we need to stick to our budget.
3. EVERY PENNY COUNTS
   A good financial habit is a great step toward destiny. Your financial habit will inform you where every one of your pennies went when you do your review. A personal budget helps you to know if you spend more money on things you do not need, thereby making you rethink and refocus on what you truly need. Ever wondered where all your money disappears to at the end of the month? Tracking expenses is the key to unraveling this mystery. Whether it’s through budgeting apps, spreadsheets, or good old-fashioned pen and paper, keeping tabs on every penny that flows in and out of your accounts gives you the insight you need to make informed decisions about your spending.
4. EMERGENCIES
   Life is filled with unexpected situations, unplanned for. Emergency could come up and these surprises could take a financial turn on you. It then proves the old saying right that it’s better to save for a rainy day. This saving is called an emergency fund. How much you decide to start with depends on you but start from somewhere even if it is small and review this account always. If you stray from your budget occasionally, the key is to course-correct and keep moving forward.