Budgeting and Finance: What You Need to Know

You need a blueprint to build a structure, or a map when you know you’re in a for a long journey. This all seems basic, doesn’t it? Yet for many people, despite money being an essential commodity for economic security, they haven’t really prepared any budget or financial plan.

Very few people have a clear-cut picture of their budget and finances. For example, very few people could tell you precisely how much interest they pay each year, or what their savings forecast will be in a year’s time.

Your budget or finance strategy is your roadmap for where your money will be earmarked so that your hard-earned wages will be for nothing. But how do you budget? How do you ensure that the money in your personal bank account is supposed to be where it needs to?

Why Do You Need To Make A Budget?

Creating a budget will help balance your revenue with your savings and expenditures. This controls your spending to help you achieve your financial targets. Most people don't realize how small changes can make a big difference over time until they start budgeting.

You need to budget if:

• Constantly overspend

• Want to get the most out of your money

• Unable to regularly save money

• Having a difficult time paying off debts

• Planning to purchase something big or preparing for a life event

By budgeting, you would be able to:

• Cap your spending habits

• Allocate money for debts due

• Feel more in control of your finances

• Spend wisely; value for money

• Reduce stress

• Being on track toward achieving long-term financial goals

How Do You Budget?

Getting started with your first budget can seem confusing. It doesn’t have to be. However, if you need any assistance, some financial experts can help you. But here are some of the simple steps you can do on your own:

1. Set realistic goals. Decide on a well-balanced budget. Don’t be too restrictive.

2. Identify Income vs Expenses. How much do you earn each month? Do you know where it all goes? List down everything you spend; this includes the fun stuff.

3. Identify Needs vs Wants. Setting priorities is key. Decide if the things you wanted to buy would bring you closer to your financial freedom or away from it.

4. Set your budget. Map out the expenses you’ve listed earlier. Check if the budget you’ve created would balance.

5. Allocate for seasonal expenses. Example: membership fees, tuition fees, shoes, clothes, etc.

6. Implementation. Match your received income with your set budget. Review your budget regularly and adjust as needed.

7. Consider consulting advice from financial experts. A financial consultant helps you create long-term plans for reducing financial risk and will work with you closer to your financial goals.

Consider working with expert financial advisors like the Carolina Money Minders who will help you with all types of financial planning. Carolina Money Minders can help you realize what actions you have to take to achieve those long-term goals, whether you want to send your children off to college or buy a new house.

Contact Carolina Money Minders today!