Budgeting is a necessary evil of controlling one’s finances. Experts recommend budgeting because it helps you set goals, and putting those goals in writing makes you more accountable.
Budgeting is not always the easiest thing to do, but it’s a must to understand where your money is going. Here are some tips and hints on why you should create a budget.
Creating a Budget is an Absolute Must
If a person wants to become financially secure, he must start with a budget. Budgets stop people from making panicked decisions about their money. In fact, by creating a budget, a person decides what he chooses to do with his money in advance.
Lack of planning only ensures the question of what happened to the money, rather than planning where your money will go. Budgeting ensures that you focus on what’s essential in both the short- and long-term.
Create A Budget Faithfully
Not only should a budget be created before paying your bills, but you should create it monthly. It is not a one-time, and you are done sort of thing.
When creating your budget, you should make it a “zero-balanced budget,” meaning that you account for every penny somewhere. Take all of the money you bring in and assign it to a category. If you have anything leftover (yay!), it is savings.
Also, write your budget down somewhere. Putting your budget in writing gives you the accountability you need with your money. Think of your written budget as just another form of goal setting. You can write it down on paper, use a prewritten form or planner, or use a software program.
Getting Started With Money Management
If a person is behind in their bills, they should first get current. That should be the number one goal with budgeting. However, necessities should always come first. Things like food and shelter should take precedence over paying debts because if a person isn’t eating or doesn’t have a place to live, the other bills don’t matter as much.
When creating a budget, you should also assign necessities first and then move on to other bills and debts. Again, by focusing on allocating cash in this fashion, the essential things are taken care of first.
Once all bills are current, you can begin setting aside money in an emergency fund. This fund would cover the unexpected, for example, a water heater breaking down.
Make sure to plan for other things, including gifts, clothing, and even car repairs. These are the sort of things that should be prepared and budgeted for, not just necessities and bills.
Budgeting is the First Step to Controlling One’s Finances
Many people dismiss the act of budgeting, but creating a budget is an essential first step in gaining control of one’s finances. A budget is a way to capture one’s financial goals on paper. Budgets should be created faithfully every month, and every penny should be planned out. Finally, the necessities should be budgeted first, and bills should be brought current as soon as possible.
If you budget faithfully and regularly, you will find that your finances get under control more quickly than anticipated. An awareness of where the money goes each month will help you pay the bills, get rid of debt, build an emergency fund, and even start saving.

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