How you ever been in a situation where although you have spent a lot of money, you still can't account for how you spent the money ? and you become so unhappy because you find out that a lot of your needs that could have been met with that amount of money you had are still unmet.
Have you ever been in a situation where although you can account for how you spent every bit of your earnings, you still are unhappy because you find out that you have left the more important and imperative things and have spent the money on the less important and urgent things.
Have you also ever been in a situation where in one minute you have so much money and in the next minute, everything is gone ?.
We can all attest to the fact that at one point in our life, we have been in situation and we all know that these issues are largely as a result of the fact that we had no budget or our budgeting was improper.
A budget according to Merriam Webster English Dictionary is ;
- a plan for the coordination of resources and expenditures or
- the amount of money that is available for, required for, or assigned to a particular purpose Source
As we can see in the first definition above, a budget is a plan and we all know the saying that anyone who fails to plan, plans to fail. As such it is important that at all times and for every expenditure we plan to make, we should make a budget for it else we may just have regrets at the end
Although sometimes I lose focus and get carried away by the excess joy and intoxication that comes from having money especially huge sums of money, most times I try to make a budget and plan for every of my expenditure.
So far, I must say that since I began making a budget for things I want to do, I have become more happy with myself and have spent my money wisely.
In making my budget, I consider a few things like;
- the importance of a thing
- the urgency
- the cost
- durability and how it will appreciate or depreciate over time.
While I consider these above mentioned factors, when making my budget, I do the following ;
I first of all try to make a list of all the items I want and need in order of their importance.
I also add to the list, some unavoidable expenses I would incur eg Logistics.
Then I calculate my net-income for the time. ( Income minus tax)
After I have known what my total income would be, I then allocate money to different items on the list.
This is how I allocate money for different items ;
I first of all allocate money for those things that are a must and are unnegotiable eg logistics or transport fares and food.
The next thing I do is to allocate a certain amount of money for savings and payments of debts . Most times I may take out 20 or 30% for savings
After that, the next thing in focus are those things that are important and urgent. Somethings can be important but not urgent so first of all, I focus on the urgent and important ones before the just important ones.
After allocating some money for the important and urgent things, I then focus on other important things, because of the fact that I may have several important things to do and the money may not be enough for all of it all, I try to spread the money evenly to every item and make sure the money touches different items.
The very unimportant items are always last on the list so I get to handle them if I have so much money to spare.
This is just how I make my budget and it has helped me alot. I now hardly find myself in situations where I get sad or confused because I realized that I've spent my money unwisely. The budget guilds my spending and ensures that it is done wisely.
Budgeting is really important and I advise everyone to always have a budget before they begin spending. There are several importance of budgeting like ;
- It helps us account for how we spent our monies
- It helps us not to lose track of what we need to do
- It gives us some sort of mental satisfaction
- It helps us plan better
- It helps eliminate unplanned spending
- It helps us know all what issues we need to tackle financial and we don't have cases were things just arise spontaneously.
These and many more are the importance of budgeting. Do you always have a budget ? I would also like to know you make your budgets. Thanks alot for stopping by. God bless you.