What You Need To Know About Budgeting

A budget helps in terms of having to save enough by every month when spending less. Without a budget, you can run out of money anytime.

WHAT IS A BUDGET? A Budget is a plan you write down on how to decide the way you spend your money each day, weekly or monthly. A Budget can be made or created for people or by a person, group of people, businesses, government, etc. A budget helps in terms of having to save enough by every month when spending less.

 HOW DOES A BUDGET HELP

  1. It helps in showing you how much money you make.
  2. How much money do you spend?
  3. It helps you to decide what you must spend your money on, be it on wants or needs.
  4. A budget helps to save more money for any emergencies like paying bills and sorting out other expenses.

Note: without a budget, you can run out of money anytime. EXAMPLE: Your budget can show you how much you spend your money on food, clothes, and others, and it can also show you how you can spend less. Let's take a look at this - what I spend money on:

  1. Clothes. N 30,000
  2. Foods. N 15,000
  3. Gas. N 8,000
  4. Repairing of car. N 10,000
  5. Laundry. N 5,000

Total Amount spent =. N 68,000

By looking at this, you can decide the cost of your spending. Also, A budget is a sketch where you can put down all your expenses and income you make, both indoor and outdoor. You might ask, what are expenses? Expenses are what you spend your money on, like what is being listed above, such as food, clothes, house, bills, money for the family, etc. A good way to prepare yourself for those future needs is to live below your means and pay yourself first. What does it mean? By minimizing your spending.

If your expenses exceed your income, you will have to determine what changes to make in balancing the budget you have created. That is why it is important to know how you can start a budget by following the steps.

 HOW DO YOU START A BUDGET?

  1. Make a list of what matters to you.
  2. Set your goals 
  3. Identify your income
  4. Identify your expenses
  5. Create or design your Budget
  6. Separate your needs and wants
  7. Track your spending
  8. Check back periodically.

Besides, there are tools for budgeting that you can use 

       BUDGETING TOOLS

  1. Pen and paper
  2. Envelopes
  3. Spreadsheet
  4. Worksheets
  5. Banking Tools etc.
  • PEN AND PAPER: This is a simple tool to use in making a budget whereby you start by writing down all your expenses, from your home payment to work payment.
  • ENVELOPES: this is another simple, low-tech tool for the budget. It makes it easy to keep and see how much money is left to spend. It is a signal that you spend less and also a great tool in helping you stop overspending.
  • SPREADSHEET: this is a highly customized way to track your income and expenses; it is a sheet where you can sketch out a budget both on Microsoft Excel and Google sheets. Maintaining a spreadsheet budget can require more time than any unnecessary options but note this, the extra effort you make may help you have a better understanding of your money and how to spend it.
  • WORKSHEETS: it is a prepared sheet containing data or assistance in planning and accomplishing some piece of work either by an accountant or students. It's a good idea to have an individual Budget for things like school supplies and other necessary items, having a budget you can stick to every month.
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