The best way to be financially stable is to have a good plan on how to deal with your bills based on a certain percentage of your income. And then save the rest to prepare for bigger goals like children’s school fees, buying a car, building a house, retirement and so on.
If you don’t make a budget for all your goals, it means you’ll spend your income as you make it and have nothing in stock for the future.
Once you exhaust your income, you’ll be “broke”and still have a number of important bills unattended to resulting from oversight.
Consequently, when you need a better thing to do, you’ll start looking for someone to give you a loan, which can’t solve your financially problem but worsen it.
Regardless of the amount you earn, big or small, budgeting will make you know how much you earn, how much do you want to spend, then start allocating funds as appropriate.
If you can manage your finances, then you can begin to build financial successes through saving and investing your money.
Budgeting doesn’t mean you’ll keep your money in the bank and pretend you’re broke when you need to pay your children’s school fees, put food on the table, change your wardrobe, or go for holidays and have fun.
Budgeting is to make you plan and prepare for all your bills ahead of time and reduce your expenses to a minimum degree.
How can you go about this, let’s say you have a $300 bill to clear in six months’ time and your monthly income is $100?
If you can save $50 in your income every month, you’ll conveniently pay the bill at its due time.
Assuming your feeding cost and other regular expenses is part of the bill, while you’re settling the $300 bill, you’ll still have another $300 in your savings.
Allocating 50% of your income each for your monthly bill and savings can’t hurt you in anyway. All you have to do is to be prudent at spending your money and you’ll be financially stable.
To be continued…