Can you remember how excited you were when you received your very first credit card? A lot of people felt a thrill and excitement that comes from having easy access to credit. The sad apart about it is that a lot of people who initially were happy to have access to credit and loans are now immersed in an overburdening debt situation. Some people just can’t seem to make their pay last till they receive their next pay check. So many families and individuals are weighed down with debts. It happens to both poor and rich alike who do not know how to make a personal budget.
A budget is a financial plan stating expected or acquired income and how it would be spent. A personal or family budget offers various advantages as it helps serve as a blueprint guiding expenditure and prevents frivolous spending. The first step to making a personal budget is to get everything written out. Do not make mental budgets. Write it all down on black and white.
Specify how much needs to be spent on different sectors such as food, bills, clothing, health, recreation, savings and others. Try to prepare the budget before receiving the expected money and stick to the budget. Be as specific as possible and give accommodations to be flexible in line with unexpected changes. Place the budget at a place where it is easy to see so that you are constantly reminded. The budget should also be realistic so that it is easy to follow. Learn how to set your priorities right and do not waste money on things you don’t really need.