A budget is a list of one’s income on one side and expenditures on the other side for a particular period of time. It outlines every planned income, that is, money expected to come in during the period in view, and also planned expenses, money planned to be spent during that same period. A person who doesn’t budget may have a terrible spending habit. When we don’t track our income and expenses, how do we know when we are spending more than expected and whether our savings are proportionate to our income?
The needs of man are many and insatiable due to the scarce resources available to us; one has to plan all his spending by having a budget in order to plan all his income and expenditure for every given period, usually per annum. This reduces financial stress and reduces the need to deal with unforeseen circumstances without having a plan. Aside from a budget, one should also know the scale of preference, which helps the individual prioritise their spending by listing it in order of importance, starting from the most important to the least important.
A budget outlines how much income you are expecting and what you have to spend it on, and a scale of preference arranges which one goes first according to the level of its importance. It is important to know that having a budget and a scale of preference helps you have a good spending habit and will also help you save, since you will have everything planned and outlined for a period of time. It is usually good to know or plan what to do with your income even before it arrives, knowing what proportion should go for this and what proportion to go for that. This way, you will only spend what you can afford every time and still have room for unforeseen circumstances. Sticking to a budget not only helps one be financially prudent, but it also helps one to be well aware of what he or she can afford or use their funds to do at any given period or time.
Having money available with me always make we extravagant, and because of that, I keep only what I need for my daily spending, like transportation and food and distribute my spending as soon as the money comes in. This way, I have no extras for extravagant spending. A planned spending makes you a disciplined spender which prevents you from reckless spending.
My name is@rishagamo, and above is my submission for the Sci-Fi Multiverse prompt Week 55 Edition 2 “DAILY SPENDING HABITS THAT AFFECT OUR FINANCES”.