Posts Tagged ‘earn money’

Why Should I Budget My Hard-Earned Money?

Whether I’m earning P200,000 or P250,000 a year, it’s important to know how much money I have after paying bills and where I am spending it. A budget is the first and most important step toward giving me knowledge about my money. It will empower me with knowledge of whether my spending decisions maximize my money. It’s not enough to earn money. I have to control it.

For example, P75 a day to eat lunch at work doesn’t seem like much money. But if I made a budget, I’d see that P75 per lunch per work day is P450 per week, P1,800 per month, and P21,600 annually. Maybe I’d rather pack lunch and save P21,600 a year for a vacation. Without a budget, it’s easy to spend P75 for lunch. But it’s hard to budget for and commit to spending P21,600 a year on lunches.

By using a budget, I will begin to ask myself such questions as:

• Why did I spend more than was budgeted for clothes or food this month? What can I do to prevent it from happening again?
• Why am I living on a debt?
• Do I really need to spend that much eating out or on entertainment?
• How long before I will have enough money to start saving for retirement or for a vacation?
• How long will it be before my credit card will be paid off?

Using the budgeting process, I can free up cash to either pay off debt or to save and invest for my short- and long-term goals. I will develop awareness about how and where I spend my money.

I can also benefit from having a guideline to help me spend my money on the things that are most important to me and my family. Budgeting is getting control. After all, it’s my money.

One major benefit of budgeting I see is freeing up money to pay down my debt or save toward reaching my goals.

Starting with a budget, I will have a greater understanding of my monthly income and expenses, which will identify money that I can put aside for savings. So, I wouldn’t put off until tomorrow what I can do today. I will ignore excuses about beginning next week and instead begin NOW!

Fortunately, learning how to personally budget my income can help me use my hard-earned money for important things.