Do you have a budget set up to manage your finances? Perhaps, not! But don’t worry, over 66% of the Indian population finds it difficult to manage their day-to-day expenses. Drafting a budget can be quite overwhelming for the first time. But believe us when we say that it will be worth your efforts!
A robust financial plan begins with a strict budget. It is a list of planned expenses and revenues that allows you to secure your financial future. All in all, it is the first step towards transforming your financial goals into reality.
Whether you are planning for a dream vacation or saving up to buy a new house, below are the top four reasons to start budgeting right away:
Allows you to spend wisely
At times, people tend to spend money on unnecessary items. Having a strict budget will ensure that you are allocating your monthly income towards specific buckets – savings and expenses. You have the complete control to diversify your earnings in different segments as you think is imperative.
For instance, if you have a significant proportion dedicated towards your monthly expenses, direct the remaining/surplus amount towards your savings. This way, you end up saving a substantial amount and make smarter financial decisions.
Gives you control over your earnings
Now that you know that budget helps in spending wisely, you have the power to control your earnings. It gives you a clearer picture of where it is utmost necessary for you to spend and save. Furthermore, it becomes easier for you to prioritise your finances and save towards your financial objectives.
For starters, as mentioned earlier, begin by keeping aside a specific proportion of your monthly income and investing it in plans that help you create your wealth over time. This amount can come in handy in case of emergencies, such as medical urgency, death in the family, job layoff, etc.
Makes it easier to achieve financial goals
Many of you aim to achieve financial goals, such as purchasing a new house or a car, starting your business venture, exploring exotic destinations, etc. However, your financial goals can take a backseat without adequate investments. This is where the importance of investing and proper budgeting comes to your rescue.
So, draft a budget that lets you manage your month over month expenses and invest a significant amount in the right type of investment plan. Doing this will help you meet your spending and grow your wealth to achieve your set financial goals.
Cuts down irrelevant expenses
The real deal that disrupts budget is overspending. The problem of spending money on irrelevant things can be eliminated by sticking to your budget plan no matter what. At the start of every month, set a limit on your expenses for particular items that you think are needed. Do not spend money on things that are unnecessary, as you will end up exhausting your budget. Adhering to your budget will automatically help you cut down on unnecessary spending.
In a nutshell, financial planning is no rocket science. But, it is an excellent combination of savings and investments that brings you closer to safeguarding your financial future. All you have to do is create a budget plan, select proper investment tools, and then stick to it. Happy investing!