Budgeting Is All About Planning

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Budget Planning

• Maintaining a household budget

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Budgeting Is All About Planning

• Budgeting is a significant in our day to day
  life. If we properly plan and budget then we can
  live a more relaxed and tension free life.
  Before you start your budget you need to note
  down your expenses every month. Firstly divide
  your expenses into two parts. The first are your
  fixed expenses which include your monthly routine
  bill payments like utilities bills, credit card
  bills, your insurance premiums, etc. The other
  ones are the variable expenses which include your
  expenses on entertainment, travel or groceries,
  etc. Now, that you have made a list of your
  expenses you should compare the total amount
  spent with the total income you get. If it is
  less than the income you get, then you have
  enough money to plan for your emergency expenses
  like illness, accident or emergency travel. So,
  when there is an emergency requirement of funds
  you are not running short of money.
• To plan you savings the usual methodology is as
  follows. The flexible expenses should amount
  around 10-15 of your income. As these expenses
  are controllable, you should always try to avoid
  unnecessary expenses always, so you dont run
  into a money crunch that is not needed.
• Budgeting is also about concentrating on your
  savings. The savings have to be around 25-30 of
  your income. If you save around this much income,
  you are very less likely to run into any kind of
  money crunch. Saving money could be even in form
  of investing.

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• Now, even after all such expenses and savings you
  still have money, then you could spend them on
  luxury or things like eating out and fun
  activities. But, incase the vice versa case then
  you have manage you variable expenses properly.
  The most important question is how do I budget.
• You should also set up your long term and short
  term goals. The long term goals are very crucial
  because they include payment of your loans on
  housing and vehicles, etc. While short term goals
  are about saving money every month to avoid money
  crunches in emergency.
• There are a few more points to be noted when you
  are creating a budget, rather precautions, to be
  precise. Never rely on windfalls which include
  revenue in for of year incentives on fests or
  even returns on tax payments. Try not taking your
  credit cards when you are going for entertainment
  purpose. If you take a credit card along its
  always tempting you to buy something or spend on
  something that is not required. Also, always
  spend on only your necessities. If it is not
  required to not indulge in unwanted stuff like
  shopping, etc.