The Art Of Budgeting
You will never be able to call yourself a wealthy person when you have $1 million worth of assets but have $1.5 million worth of debts
. No matter what you do, even if you work 24 hours a day 7 days a week, if these values won't change, you're still a very poor person. One of the best keys to ensure you can keep your expenses or debts at an all-time low while you increase your sources of revenue is to make a budget and stick to it.
You must keep in mind that a budget is not the following:
1. It's an exact amount.
When you make a budget, you don't always go for the exact amount, unless the costs of items in your budget won't change in any given period. Otherwise, you have to make your own closest estimate.
2. A Budget stops you from accumulating debt or spending.
There are a lot of people who may feel apprehensive about making a budget since they believe that they will no longer be able to spend anything afterwards - they think that they can't watch any more movies, buy new clothes travel to other places, or just learn to live life to the fullest. I'll tell you that this is completely absurd! My partner and I have been doing this for years, and yet we don't have to experience the feeling of being deprived.
A budget, however, should make you aware of your limits to the things that you can only afford. It should establish the highest amount that you can probably spend, or else, your income will never be able to cover your expenses.
3. It doesn't help you save.
Always remember that you have full control of your budget. If you don't want to save, you can always equal your expenses with your income. However, savings are essential so you can have something to use during emergencies. When making a budget, you can always consider your savings as additional expenses to guarantee that you can have something to use during a rainy day.
4. They are just expenses.
When you're making a budget, you will not only identify the costs that you are likely to incur. You also have to specify your sources of income. This is especially true when your expenses are rather high. You have to make sure that your income will be more than your budgeted costs.
by: Lawrence Perry
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