He budget It is a tool that one can use to make personal goals healthier as it is a key factor in achieving total control over money.
In other words, even though it seems difficult to have numbers, accounts, subtractions and divisions; The budget is essentially a detailed written statement of total income and expenditure over a period of time.
Forbes points out that by creating a budget, a person will experience at least four benefits: First, gaining absolute control over money, as he will have determined how much he earns and will arrange weekly, fortnightly or even monthly expenses.
The second benefit is that by identifying necessary expenses, unnecessary expenses are avoided so that personal finances are no longer affected by the known ant expenses.
Third, the person will be aware of how much he can save to achieve his goals, whether in the short, medium or long term. You can also set up a fund for emergencies and unforeseen events.
How can you achieve financial freedom?
Finally, you are aware of the extent to which you can get into debt, which allows you to apply for or obtain credit if you need it.
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How to make a budget
The Practical Finance Portal recommends following four steps to create a budget:
1. Add up the income to determine the net amount regularly received. If the payment takes place once a month, that amount is the salary received. But as the data changes, so do the calculations.
2. Paying yourself is the most important thingEven before you start spending money on other expenses, it’s important to prioritize your own savings. In this case, it is recommended to save 10% of income. But if it’s very forced, you can start lower and move up as needed.
3. Calculate expensesWrite down on paper all the necessary expenses planned for your own maintenance, for example, food, transportation, housing, services, among others. Both fixed and variable costs are included.
4. Let everything be recorded to keep track of actual income and expenditure. This is done in an Excel spreadsheet or with another functional tool.
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Source: Eluniverso
Mabel is a talented author and journalist with a passion for all things technology. As an experienced writer for the 247 News Agency, she has established a reputation for her in-depth reporting and expert analysis on the latest developments in the tech industry.
