For individuals who want to know exactly how much they have to spend on a month to month basis, what expenses they have, and how much of their future personal income will be allocated towards their monthly expenditures, personal budgeting is something you should do. Depending on how much you earn, what monthly expenditures you have, and how far ahead you like to plan, setting up a budget is a great way to know what you are going to have available to you, and what amount of your income is going to each expense allocation.
Pros
There are several pros that you will find when you choose personal budgeting as a plan for allocating funds; some of these are:
– you see exactly where your money goes (rent, groceries, savings, pleasure, etc);
– you will know exactly how much you have to spend each month, and how much you can set aside;
– you can plan ahead with personal bills (credit cards), and allocate additional funds to certain cards each month; and,
– you do not have to worry about whether or not you have sufficient funds for the payments and expenses you have.
By setting up the budget, you will know you have a certain amount of income each month for each category, and once that amount expires, you are out of funds.
Pros
There are several pros that you will find when you choose personal budgeting as a plan for allocating funds; some of these are:
– you see exactly where your money goes (rent, groceries, savings, pleasure, etc);
– you will know exactly how much you have to spend each month, and how much you can set aside;
– you can plan ahead with personal bills (credit cards), and allocate additional funds to certain cards each month; and,
– you do not have to worry about whether or not you have sufficient funds for the payments and expenses you have.
By setting up the budget, you will know you have a certain amount of income each month for each category, and once that amount expires, you are out of funds.
Cons
There are a few drawbacks you should consider with personal budgeting including:
– unexpected surprises (as life is full of emergencies and unexpected occurrences, you never know if something is going to go wrong);
– you might overcompensate in some areas, and not have sufficient funds for other payments you need to make;
– you might run in to an unexpected financial necessity (such as doctor bills or car troubles), which you cannot plan ahead for; and,
– you have to set time aside to create these budgets, and stick to them, if you want your personal budget to be helpful and to work.
The art of personal budgeting is one that you should master. Although there are certain drawbacks, you can always create an emergency fund, or you can use other budgeting methods as well (envelope in cash method, an emergency credit card, etc). But, if you budget, you are going to see where you are spending each month, where you are spending too much and need to cut back, and what you are doing incorrectly each month, which is leading to not having sufficient funds for certain necessities.
Knowing how to create a budget, and continually practicing the skill of personal budgeting is something you will do each month. Over time, you are going to learn your mistakes, you will see what changes have to be made, and you will even find certain tricks which will allow you to start a savings account (or setting money aside for savings), because you have properly learned how to budget your money. Although it takes time to learn, those who do it find it is well worth the time, and is the only way to keep track of spending habits.
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I wouldn't have a budget because, i just cannot maintain my money 🙁