Planning your Personal Finances

Budgeting is not exactly something that most people enjoy doing. It brings up connotations of cutting back, tightening the belt and making sacrifices. For most people, they view budgeting as something that will lessen their enjoyment and give them less discretion and freedom to live their life and spend their money in the ways they enjoy most.

However, budgeting does not have to be such a difficult and painful process. Its purpose is not to make your life miserable, but to give you back control of your finances and your life. Just like all things worth while, it takes a bit of effort and determination, but making a budget and sticking to it is very much like living healthily or going to the gym. Whether it’s enjoyable or not depends entirely on your perspective and way of looking at the situation.

Budgeting has nothing to do with being broke or denying yourself luxuries. What it is really about is looking at you income and finances in advance, and sitting down and deciding how you would like to spend the money and where you want it to go. Some people earn very little and never budget, others earn a lot but continue to budget, not because they are afraid they are going to run short, but because they want to ensure that they are in control of their expenditure and do not spend more than they want to on certain things.

You should always know on what you are spending your money!!

This does not mean stopping or reducing such expenditure, but at least be aware of where your pay cheque goes every month. Try keeping track of all your expenditures for one whole month. If this is something you have not done before, you’ll be amazed at what you actually spend your money on. Most likely, the expenses that worry you most and you deem the most important will not be costing you as much as you though, you may even be spending more per month on things like going to the movies or drinking coffee in cafes than you do on electricity bills and other such worries. Once you know where your money goes, this gives you the control to redirect it if you wish. You can decide that you are spending too much on some things or even not enough, on some things and take back the control and direction of your money.

This is what budgeting is really about.