WHAT IS A BUDGET?
A budget is a financial plan of spending. This is an estimate of expenses and income for a period of time.
What is a Budget in more detail?
The word budget may cringe anyone when hearing this. Budget may seems a daunting task to do for some. They feel that why they should budget if they have more money and having a budget is not necessary to do. If this is their mindset about what a budget is, then the result will be a life that lives from paycheck to paycheck.
A budget is telling your money where to go instead of wondering at the end of each month where it went. At the start of my paycheck I create a budget and stick to it. I wanted a debt free life, so creating a budget is very important. A budget is a key in making our financial goals a reality.
With the help of creating a budget, it does make an environment stay in course for making our finances wisely. Like if our Government will create infrastructure, roads, housing, transport, health care etc. This is our guideline for our spending and saving.
For our homes, we have goals like education for children, marriage, purchasing a house, and travel or vacation, budget is made for these to be achieved.
A budget is created for a particular purpose that allocates future income towards expenses, savings and debt. As much as possible I don’t want debt, so I always create a budget.
On the other hand, a budget is a plan on how you will spend your money for a certain period of time. For example a monthly, quarterly or yearly budget.