Role of budgeting in making better financial decisions.

[TOZZIBLINKZ]

The main purpose for adopting the financial activity of budgeting, is so as to be good in the area of money management. Majority of individuals want to learn how to manage their money by endeavouring to allocate them to the most pressing needs and to the most pressing wants and desires they have. Another possible reason why majority of individuals want to manage their money is because money is a very perishable resource which if care is in taking can cause an individual to lavish it irresponsibly. The most proper time for you to apply to financial activity of budgeting is mostly when you are going to shop for items or going to shop for groceries in which you are going to use possibly within a particular month or week. Before heading out to the grocery store or today foodstuffs shop, you must first of all pick a pen and a paper and write in a tabular form the names of items you are going to buy and their possible prices.

In this way you get to go out with only the exact amount of money enough to accommodate what you are going to buy. This strategy absolutely give no room for you to spend outside your budget, and if an emergency happens such as having a flat tire in your way to the grocery store, you can possibly allocate money meant for a less pressing need or want to the repair of the car tire. It is also important that we understand that it is one thing to be good at budget preparation and it is another thing for us to stick to our budget. We shouldn't only be budget preparators , but also we should be budget stickers.

 

[Yusra3]

The budgeting process is an important one. It's the first step toward making better financial decisions, which can help you save money and invest it wisely.

The budget process helps you identify your needs, establish a realistic goal for those needs, and create a plan of action to reach that goal. That plan includes setting aside money for savings and investments while also taking into account other expenses such as rent or mortgage payments. You might also want to include things like insurance payments and groceries in your budget.

Once you've identified your needs and established a goal, it's time to put together a plan of action. This plan should be presented in detail so that everyone involved knows what they're doing and how they'll get there. The more detailed your plan is, the better off everyone will be when it comes time for them to make decisions about spending.

 

[moonchild]

Great article, budgeting is an essential tool in making better financial decisions. By tracking our spending and identifying areas where we can save, we can make informed choices that will help us achieve our financial goals. Not only does budgeting help us to avoid overspending and excessive debt, but it also provides a roadmap for our future financial success, with budgeting you will be more careful on how you spend your money, this goes a long way in curbing impulse spending.

The biggest problem plaguing our financial decisions is impulsive spending, some people even after making a budget they end up spending more than they are supposed to because they can control their impulse, if one has that type of problem the best thing to focus on is solving the problem first, and then go ahead start making budgets on your spending to further mitigate it, it is not easy but definitely worth it.

 

[Abigael]

Yes, it is one thing to prepare a budget and it is another to stick to it. Self discipline is paramount when it comes to doing as your budget says and not going outside it. It helps a lot to learn to say no to your spending urges whenever you get them. The more you say no, the more your discipline grows.

As for making the budget, you need to have a realistic budget that has everything your need as your priority. You cannot budget on a car when you have not paid rent and food. So your priorities are your basic needs. But it helps a lot to buy yourself some luxuries every now and then so that you can satisfy that human need.

Then you need to have realistic prices for those items that you are going to but. I assume this is not your first time shopping, so you have a clue of the prices so that you don't budget too high or too low.

 

[Mika]

making a budget means you are dividing your expected income into different categories according to your needs. Some of your common categories should be necessities, wants and wishes, savings, and investment funds. In the necessity category, you can add things like your rent, loan repayment, food, mortgages, credit card bills, fuel, etc. In the wants and wishes category, you can include things you desire for instance buying an expensive gadget, buying a game, going for a vacation., dining in a restaurant, etc. When you create your budget you can allot appropriate funds for your spending. By doing so you will not only be wise enough to spend properly but also be able to save money and build investment funds. When you make a budget, you need to take care of two things, one, you need to create a realistic budget, and two, you need to stay within your budget no matter what.