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Budgeting Guide

A budget is a financial plan that outlines income and expenses, aiding in resource allocation and financial goal achievement. Budgeting is important for financial control, goal setting, debt management, and emergency preparedness. To create a personal budget, track income, list expenses, set goals, create a plan, and regularly monitor and adjust as needed.

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16 views1 page

Budgeting Guide

A budget is a financial plan that outlines income and expenses, aiding in resource allocation and financial goal achievement. Budgeting is important for financial control, goal setting, debt management, and emergency preparedness. To create a personal budget, track income, list expenses, set goals, create a plan, and regularly monitor and adjust as needed.

Uploaded by

panghaldharmender4591
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Understanding Budgeting

What is a Budget?

A budget is a financial plan that outlines income and expenses over a specific period. It helps

individuals, households, or organizations allocate resources, control spending, and achieve financial

goals.

Why is Budgeting Important?

- Financial Control: Helps avoid overspending

- Goal Setting: Enables saving for short- and long-term goals

- Debt Management: Supports timely debt payments

- Emergency Preparedness: Builds a safety net for unexpected costs

Steps to Create a Personal Budget:

1. Track Your Income - Note all income sources (salary, side gigs, etc.)

2. List Expenses - Separate fixed (rent, bills) and variable (groceries, entertainment) expenses

3. Set Goals - Prioritize savings, debt repayment, and lifestyle choices

4. Create a Plan - Allocate money to categories based on your goals

5. Monitor and Adjust - Regularly review and adapt the budget

Types of Budgets:

- Surplus Budget: Income exceeds expenses

- Balanced Budget: Income equals expenses

- Deficit Budget: Expenses exceed income (not ideal, may lead to debt)

Tips for Successful Budgeting:

- Use budgeting tools or apps

- Set realistic limits

- Include savings as a fixed 'expense'

- Review monthly to stay on track

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