A perfect planned budget and Personal finances management involve recognising your income sources, current expenses and future expenses. Budget is created by working on the extracted information that helps you in meeting your financial goals. The basic aim of a budget plan is to maximise your savings and bring a healthy smile all the time without bothering unexpected future obligations. There are many benefits of budgeting some of them include:
- Helps in reaching your financial goals
- Enables you the control of your finances
- Helps in analysing and tracking your spending’s
- Makes you organise your savings and expenses
- Provides an idea to develop and manage your debts
- Determines various ways to increase your revenue streams
In todays’ world there is growing demand for creating an effective personal budget plan to meet the ends, the final result of a budget plan is very important as it is used in matching incomes and expenses. Everyone can enjoy successful financial life by following best budgeting practices and strategies; this plan is quite useful in securing your future investments and could help in raising cash for retirement. The following 5 simple steps help in accomplishing a healthy smile with a proper budgeting
Step1: Figure out your income streams and determine the total sum of your income from various sources, you must include income that you generate from your leisure or part time jobs also. The following are a few tips that help in tracking your monthly expenses:
- Collect receipts for every purchase
- Organise all your receipts in one place
- Get credit card statement from your creditor
- Use software or mobile application to track
Step2: List out your monthly bills and essentials for every month, you can include your bill payments like mortgage, credit card, utility or electricity bill. Estimate the amount you spent each month and how much amount you require to meet your needs.
Step3: If you owe any debts, eliminating them should be your top most priority. Include the total amount of your debt cost in your budget plan along with their interest payment and penalty charges due to late payments. Now, after figuring your monthly expenses find out the best debt elimination plan that can successfully exclude your debts.
Step4: Check for any possibilities to make some extra money in your leisure and increase your income level.
Step5: Once you repay all your debts saving should be your top concern, allocate necessary funds from your income towards your savings account. Many advisors say the more amounts you have in your savings account the more freedom you have in making financial decisions and stay happy.