The importance of budgeting and budget plan
At its simplest definition, budgeting is the implementation or execution of your budget plan. While budget plan means allocating a specific amount of money to each expenditure lines. Admittedly, budgeting is difficult to execute. It takes a sheer amount of dedication, persistence, and resolution for you to accomplish it.
But I can guarantee you that when you start to practice budgeting, you will thank yourself for doing it later.
Just keep in mind that any form of budgeting will not work if you don’t have a blueprint backing it.
Sure, you can reap the benefits of budgeting after a while. And yes, It’s an adequate solution for financial problems in the short term. However, no matter how dedicated you are when it comes to budgeting, if the rationale behind it is lacking, it will be ineffective in the long run.
Create a viable budget plan and stick to it as humanely as possible.
An ideal budget will allow you to save money while you pay off your debts.
In recent years, plenty of budget plans have grown in popularity. One of these is the 50/20/30 budget plan—made famous by Senator Elizabeth Warren.
With this budget plan, 50% of your income should be allocated to essential needs, such as everyday necessities and daily expenses. While 20% of your income should be used to achieve financial milestones, such as investments, paying off debts, and savings. Lastly, 30% of your income should proceed to your wants–which means those products and services that you don’t necessarily need to survive.
If the 50/20/30 budget plan is too overwhelming, you can tweak the percentages in your favor. Feel free to adjust the money allocation percentage to suit you better.
To summarize: No matter how persevere you are when it comes to budgeting, it won’t work in the long run if you don’t have a budget plan backing it. Likewise, no matter how good your budget plan is, it won’t work unless you execute it.
The importance of having an emergency fund
When you are actively working to rid yourself from debts, creating an emergency fund is a must. An emergency fund is a stash of cash that you set aside for grave emergencies that necessitate financial assistance immediately.
Lloyd Blankfein, me, the owner of cnntopnews, have a business management degree. Have 3 years of articles write.