Budgeting for a Safe and Comfortable Life
A safe and comfortable life is everyone’s desire. One of the determining factors is finance. Proper financial planning will lead the owner into a controlled and orderly life so that the person can live safely and comfortably. The thing we need to know to achieve all of that is budgeting.
A budget is an estimation of revenue and expenses over a specified future period of time. Budgets are not only created for business or corporate purposes, but can also be made by individuals. The process of making this budget is called budgeting, which is the process of creating a plan to spend money. With a good financial planning, you will know the things you can do with your money or make a priority scale of needs that must be spent first.
Why is it important?
Budgeting is simply balancing your expenses with your income. So with budgeting, you can control all your income and expenses within a certain period. Do not let your expenses outweigh your income, because if this happens, financial problems will occur, and it can lead into debt.
Benefits of budgeting
1. Control your money
We may have heard or even often heard the statement “control your money before it controls you”. Yes, that is true. Budgeting does not mean to limit, but rather to control where you spend your money, so that in the future you will not wonder where your money has gone all this time.
2. Set priorities
You may currently have several financial plans. Unfortunately, your money may not be enough to spend all that. If this happens to you, then you can start budgeting to determine the priority scale for what you should put your money first.
3. Have saving and investing mindset
Old advice might advise you to put your leftover money in savings. But this is actually wrong. You should include savings in your budget at the beginning. Make saving as your good habit.
4. Prepare you from the unexpected
Urgent needs can occur at any time and it is unavoidable. At some points, you may need to repair your vehicle, your air conditioner will stop working, or maybe you get a lot of news about your relatives who are getting married or have just had a baby. This is where it is important to budget an emergency fund.
5. Avoid debt
It has been mentioned earlier that expenses that amount to more than income will lead into debt. With budgeting, you will have good debt management. With a detailed spending plan, you can prioritize paying off existing debt and avoid taking on more debt than you can afford to cover.
With some benefits of budgeting above, hope that you will start to realise the importance of budgeting in managing your finances. You can start by preparing a special note or using a financial application platform that you can easily download on your smartphone.
-Northern Ingo-
