Budgeting is the process of creating a plan that outlines how you will spend your expected income. Essentially, budgeting is a system that ensures you take control over your money instead of your money taking control over you. Instead of your money telling you where to go, budgeting helps you guide and direct your money to where you want it to be.
Budgeting is foundational to achieving your financial goals. Maybe you want to retire at 60, pay down 10% of your mortgage or pay 50% of your child’s college tuition costs in cash. Budgeting is how you ensure you are directing your money towards these goals in a way that guarantees you reach them.
Budgeting is a crucial part of personal finance and it’s difficult to achieve any form of financial wellness without it. In essence, budgeting is the process of creating a smart spending plan.
There are two key components of a budget: your income and your expenses. Income is money earned...
Written by True Tamplin, BSc, CEPF®
Personal finance is the process of planning and managing your personal financial affairs. It involves all aspects of your financial life, including saving, investing, spending, banking, insurance, mortgages, investments, retirement, tax, and estate planning.
Understanding the concept is essential because it helps you make smart decisions with your money. It gives you a roadmap to financial security and freedom.
Without a solid understanding of personal finance, you may find yourself making poor choices with your money that can have long-term consequences. For example, you may end up carrying too much debt, or not saving enough for retirement.
Ultimately, personal finance helps you...