Put simply, a budget is a written plan to decide how you will spend your money each month.
A budget helps you make sure you will have enough money every month – without a budget, it can be very easy for many individuals to run out of money before their next paycheck.
Creating a budget will show you:
- how much money you make
- how much money you spend
On top of that, a budget can help you decide:
- what you’re spending your money on
- if you’re able to spend less money on some things and more money on other things
- ways to save
Why do you need to save money? Well, you might need money for an emergency, and creating an emergency fund can help ease the stress of the unexpected.. You also might need to buy something more expensive, like a car and, if that’s the case, budgeting will not only help you save, but will also help you figure out how much you can comfortably spend each month on things like insurance, upkeep, and loan payments.