Have you ever wondered how easy it would be if you had a laid down budget for your expenses ? Most people just spend money without a budget and more often than not they end up in situations they can hardly get themselves out of. Budgeting is the process of creating a plan to spend your money. The plan is the budget .
Imagine if you had a monthly budget or even a weekly one and you tried to abide by it how much growth you will have made . Did I hear you say impossible? Impossible is only as far as you believe it is .
You need a budget because :
A) It ensures you do not spend money you do not have : A lot of people spend more than they can afford . Sometimes it’s due to societal influence and other times it’s just pure indiscipline. This situations makes you in debts and wallowing in regrets . A budgets helps you stick to the plan and know the plan … even if you go above , you know when it is too far ..
B) You prepare more for emergencies with a budget : emergencies would always come if you agree or not and most times we are caught unawares and could get stranded . A budget makes sure you are not flat without a solution even if it’s little . Your budget should always involve an emergency fund which you could fall back to .this helps you not to immediately go to into debt and many times you are grateful that you had this emergency funds .
C) Budgets can be instrumental in identifying constraints and bottlenecks. A carefully developed budget will always consider capacity constraints. Managers can learn well in advance of looming production and distribution bottlenecks. Knowledge of these sorts of potential problems is the first step to resolving or avoiding them.
D) Budgets help in paying off debts:
Paying off debt is a major benefit of having a budget. A budget should include line items for each expense, with current debt being just one of them. As long as a business owner follows the budget and accounts for the monthly or quarterly debt payments, then they should be able to pay the debt off promptly.
Budgets are important for growth weather it is running a business or managing a home . Even as an individual you need a budget to help with what is necessary and what is not . You need a budget to go far .