Personal Budget

Budget

Personal budget is a finance plan that allocates future personal income towards expenses, savings and debts. Personal budget is an important tool for everyone. You don’t get rich by earning more; you get rich by using it wisely. You might have heard about many people who earned more but got poor because of their spending habit. If you plan well, you can satisfy all your needs and save some of your earnings. It also helps you in finding out all your extra spending.

There are several tools available for planning your personal budget. Many websites provide software for budgeting and help in managing personal finance. If you have any doubt in preparing your personal budget or want to know the percentage of allocation, you are free to contact me in Ask Moran section. I will help you in preparing your budget. Find out the percent of income to allocate for different categories like house, savings, medical etc. Many people have suggested different percentage of income for different categories. It’s always suggested to allocate a minimum of 20% of your monthly earnings towards savings.

Set a goal for every budget. Your budget should be flexible and easy to understand. Analyze the ways the money is going out and try to block them.  Your debt should not be more than your previous month’s debt. If it is exceeding then try to cut down your expenses but don’t reduce your savings. Track all the expenses and make sure that no money is spent on the extra cost.