Personal Budget: Learn what a is and how it can help you achieve big goals

Most people struggle when it comes to financial education. We know that this subject is not properly addressed in schools, which shows that we still have a lot to learn. To give you an idea, a large number of people faced the pandemic without having an emergency reserve.

Before thinking about how to use your money in the best way, you must take important steps to control your spending. Setting up your Budget is the best way to do this.

What is a personal budget and why should I have one?

A personal budget is a report of all your expenses and investments. It may seem difficult at first, but all you have to do is write down everything you spend.

Start with the current month, write down your monthly salary amount, and create columns in a spreadsheet to enter all your expenses for the month, such as fixed expenses, current expenses, etc.

The most important thing about your budget is that you can understand everything that goes into your budget and what goes out. Thus, you will be able to organize all your finances with ease and you will be able to plan your future, predicting how much you will have to save or spend to have new achievements.

This will bring several benefits to your financial life. Keeping you aware of how much money is being spent, being able to determine when you want to buy the car you’ve always wanted, important items for your everyday life, or even increase your wealth.

Benefits of having a personal budget:

1. Know where you should save more to reach your goals;

2. Balance your financial life, separating your expenses by categories, and analyze where you need to invest more or save more;

3. Write down your expenses easily and practically;

4. Avoid spending more than you earn;

5. Be able to plan so that at the end of the month you have more money left over;

6. Increase your ability to achieve important goals in life.

Money is essential to achieving many things in life. Therefore, it is necessary to have control over everything you have so that the chances of investing in great achievements and having a more prosperous life increase.

How to start your budget

A spreadsheet will be your best friend when creating and controlling your budget, it will guide you to the best way to save and achieve your goals.

First, know precisely how much you earn per month. If you are part of a family, list the salary of all the people who contribute to the formation of the monthly income.

After that, start listing everything you spend. Don’t forget to list all your expenses for the month: from the fixed ones, like water and electricity, to the most superfluous, like the coffee you drink at the bakery before going to work, for example.

Your budget should also include debt that needs to be paid off if you have any. A good tip to deal with them better is to set a deadline for making the payment. After all, you will only be able to set up your emergency reserve and organize yourself for your next investments with the debts paid off.