If you need a financial security it is important to have a budget planning.
Below are some of the important reasons why you need to have a budget:
- It helps you track the spending
It is very usual to spend the money more than what we have if you don’t have a budget planning. It is very difficult to track where the money is ending up and would lead to no savings. Earlier if we are able to pay all the bills and have some money put to savings, we are good. But the people using the credit card don’t realize that they are overspending than the earning until they are drowning in debt.
But if you create a budget, you will never find yourself in this debt. You will have the track of your earning and will be able to segregate the earning into best of its place by planning. You will have clear picture of how much you can afford to spend each month. You will be able to plan your future financial goal for studies, a trip, monthly expenses, insurances, investments and even retirement plan.
- Happy retirement
Like any other savings, a retirement saving plan is very important. To lead a happy retirement lifestyle with all the facilities that you wanted after your retirement, make sure to have a retirement saving plan. Budget planning helps you keep a track of your retirement savings.
It is important to build investment contributions for retirement in your budget. If you set a portion of the earning to the retirement fund, you will eventually have a good saving for your happy retirement life.
- Helps in long term goal
A budget helps you set and track a long term goal like investments, insurance coverage and retirement savings. A budget helps you in mapping the financial goals, tracking the income and expenses, helps in saving money where ever possible and also tracks the progress of money savings. A budget cringes you from buying unwanted things for a bigger goal such as car or house.
- Helps in preparing for emergencies
Unexpected surprises can happen to anyone. Some of them may affect us financially as well. We have to be prepared for them. A sudden lay off for instance would shake finance badly. That’s the reason an emergency fund is very important. When planning a budget, emergency fund should be definitely be a part of it and religiously contributed to – no matter what so that we don’t have to face worse when a uninvited misfortune happen anytime of the year. Set a realistic amount for emergencies. Start small. But be consistent.
How many nights have to not slept thinking about where the money is going? How many month ends have you waited for paychecks? How many times did you check your account for arrival of money on the salary day? These are the symptoms that money is ruling you. Instead if you want to rule money start planning a budget! Take back your control.