Why prepare a household budget?

Learn More About Budgeting

A household budget might sound like something that is for people struggling to make ends meet, but the reality is that a household budget plan is an essential tool for everyone. Budgeting is the first step in the creation of your PERSONAL financial plan:

  • P – Prioritize – budgeting encourages you to decide what your priorities are for your money, and gets you to think about what they should be. Is it saving for retirement, or going on the cruise you have always dreamt of?

  • E – Empowering – by going through the motions of preparing a household budget you will actually feel empowered as you realize that you can be in control of your money.

  • R – Reduce Spending – this can happen on a conscious level as budgeting allows you to see where all your money is going, and also on a sub-conscious level as you become more aware of your money.

  • S – Security – it is never too early to start thinking about your financial future, and budgeting allows you to start making plans to ensure your financial security.

  • O – Overspending – Having a budget in place will stop you from overspending, and help you to set guidelines for reasonable spending.

  • N – Needs vs Wants – One very important aspect of budgeting is to determine what you need from things that you want. This often gets overlooked, and we convince ourselves that things we want are actually necessities. This stage requires honesty and is very personal.

  • A – Afford – Budgeting allows you to see what you can really afford; this is particularly important when it comes to making large purchases, such as a car or house

  • L – Liberating – Once you begin the process of budgeting you will feel liberated. This is the start of your journey to financial security and freedom.

  • Financial PlanBudgeting is an important stage of a financial plan. Once you have budgeted and know you financial status quo you will be in a position to start implementing the rest of your financial plan.

  • We typically think of personal money management as wisely using what we have so as to preserve it. However, in our current global economy we must now always consider possible income streams that we can use NOW and in the FUTURE when we are ready to retire. In addition to creating multiple income streams we must also learn to better manage our debt. Press here to learn more.

    Also see this web site for Information on how to pay off debt.