When it comes to Budgeting a lot comes to mind. We think of figures, we think income and expenses which is not bad at all as that's exactly the nitty-gritty of Budgeting ; what comes in, what goes out and where they are going to. However, budgeting in itself is more psychological than we think. What's the essence of planning a budget and not being disciplined enough to follow through.
Let's look at 4 steps of building a household Budget.
1. Know your income
One should know exactly the total income that comes in every month. Even if you are an entrepreneur, a salary earner, or an investor. Knowing exactly what comes in gives you an overview of the figure you would be working with.
2. Know your expense
Now, this is where there is always a problem. The expense can be broken into avoidable and unavoidable expenses. Avoidable expense always pops up now and again: unplanned dates, Loan requests from friends and family, new sneakers or shoes you saw on Instagram; There are so many avoidable expenses.The only solution here is discipline. Now Unavoidable expenses are those expenses you must incur like light bills, important subscriptions, groceries, foodstuffs, et al. You should separate your expenses into these two categories and give priority to the important things.
This is the most important phase in budgeting this is where you plan how much you would spend on what and those you will ignore.
Once this is done you have to make up your mind to stick with what you have planned
The mainstay of budgeting is discipline, sticking to the budget right from the beginning down to the end, avoiding impulsive buying ; if it's not planned for then it's not needed.
We trust this will guide you with making the best decision for you and your family.