I mentioned this in my talk on Money Matters, Mommy Matters last September 1st at COL Financial:
Having a Budget is telling your money where to go, instead of wondering where it went.
Following a Budget allows you to create a spending plan for your money, it ensures that you will always have enough money for the things you need and the things that are important to you. Following a budget or spending plan will also keep you out of debt or help you work your way out of debt if you are currently in debt.
And believe me when I say this, so many Filipinos are in DEBT. According to World Bank Financial Capability Survey, only 14% of Filipinos have formal savings (in banks) while only 18% invest in stocks or bonds.
And, how many Filipinos own homes, cars, and life insurances? Only 17%. The rest share houses with others or rent, and have a a car insurance but not a life insurance! This is such a sad reality.
Please practice proper RISK MANAGEMENT - create and FOLLOW a budget! You don't want to live from paycheck to paycheck.
By creating a budget plan, you can easily check which months your finances may be tight and which ones you'll have extra money. You can then look for ways to decrease your spending and create more extra for savings and investments.
Extending your budget out into the future also allows you to forecast how much money you will be able to save for important things like your dream vacation, a new vehicle, your first home or home renovations, your child's education, or your retirement. Using a REALISTIC budget to forecast your spending for the year can really help you with your long term financial planning. You can then make realistic assumptions about your annual income and expense and plan for long term financial goals like starting your own business, investing in real estate, and more.
To get you started, you can download the comprehensive FAMILY BUDGET PLANNER I created (just sign-up as a Member ofMoney Management Community). Community members also get regular tips from me on proper allocation of funds and stocks, and more.
I'm also creating a template to help you calculate how much you need to set aside monthly and what rate of interest you need to achieve specific financial goals in a certain time period.