The subject may seem complicated, with numbers, accounts, subtractions, divisions, etc., but if we told you that creating a budget is very easy, would you believe us? From a personal finance point of view, budgeting is very simple and very important for controlling your money.
What is a budget for?
In simple terms, making a budget will bring you four financial advantages that you will surely appreciate over time:
To have control of your money. With this, you will be able to determine your income and plan your expenses every week, fortnight, or month.
Identify the necessary expenses and avoid unnecessary ones. This way, you will be able to eliminate the so-called "ant ant" expenses.
Know your savings possibilities to achieve your goals, whether short, medium, or long-term, and create a fund for emergencies.
Find out how much debt you can handle. This will let you ask for or use possible credits if you need them.
How to create a budget? Let's go step by step
The first is to know how much money you have to spend.
Once you know the amount, write down all your expenses, such as purchases, regardless of their size, utility bills, rent, house payments, car payments, tuition, etc.
Remember that the more detailed and realistic your budget is, the better it will serve you.
Do you know the price of each item? If so, write it down.
Finally, add up all the costs and subtract them from the amount of money you have to spend.
With this result, did you have too much or too little money?
If you had money left over, congratulations! This is your saving or payment capacity in case you need a loan.
If you are short on funds, you should cut out unnecessary expenses or those that can wait a little longer.
If after we explained in detail how to make a budget, you still think it is very tedious, we have good news for you: technology has arrived to simplify our lives, and the financial sphere is no exception since mobile applications are an excellent tool to reduce time and effort when making a budget.
And if during the year you had problems with your finances for not anticipating expenses, use a calendar with the most important dates of each month so that the same thing does not happen to you and you can plan your expenses in time.