Post about "Budgeting"

Budgeting – What It Is and Why You Need It

Most of us have probably heard the word “budgeting” for thousands if not millions of times in our lives, yet a lot us still asks “What is Budgeting?” First of all, the word budgeting has the root word budget. And budget came from an old French word bougette, which means purse. Based on its etymology, budgeting has everything that has to do with money. And since the purse is used to keep and hold money, then budgeting has the very same duty to hold and keep money.However, if you are still wondering what is budgeting exactly, then prepare to have a rather more in depth definition in the modern times. In its most basic form, budgeting is the act of planning for all expenses. Starting from the moment that the money comes in to the very moment that it exits, the flow should be thoroughly planned. The purpose of budgeting in every person’s life is to create a concrete assessment of all financial matters. For example, if you are earning a $1000 every week, you should divide this money for all your needs. You should have an allowance for your food expenses, for your household bills, for your transportation and communication bills, etc.There are many types of budgeting, but the most common ones are those that are used by individuals and simple households. The main reasons why people adapt a specific budget plan are so that they could avoid a lot of financial problems and for them to be able to have a good flow of money. Let’s take an ordinary household for example. If they do not plan for their budget, they will eventually spend all their money down to the last penny. And when an emergency situation arouses, they will not have anything to spare. So they will simply take the action of borrowing money from a loaner. But loaners have interests on their money, so the family will have to pay so much more that what they borrowed.As to what is budgeting exactly, it will all depend on how you adapt it to your own life. You can choose it to be your guideline for your regular expenses, or it could be your disciplinary partner that will help you straighten your reckless and wanton spending. Whatever it might be, I hope you now understand what is budgeting and what role in could play in your life.