Many people do not have a personal budget or a family budget.
They think that it is hard to set up a budget. Some of them think that setting up a budget means to stop spending money.
That is not true.
A budget is rather easy to set up.
All of us have fixed payments to make every month.
For example, our internet bill, cell phone bill, the utility, food, transport and recreation expenses. While the amount may differ month to month, the difference is always within a narrow range.
If your utility bill is within the range of $80 to $100, you can put in the higher amount in your budget.
When the utility bill comes to $90 in a month, you have an extra $10 to spend on something else or to save up.
The same concept applies to all other regular expenses. It is impossible that you spend $50 on transport this month and $750 for transport the next month.
The range is probably from $50 to $100.
A budget will help us to spend money wisely.
A budget should always have a sum saved up for emergency. If you put aside $50 to save up for emergency, at the end of the year the sum will be $600 assuming that no emergency happens to take a huge chunk out of it.
When we do not have a budget, we may overspend on items that are not so important. When we have a budget, we will spend money wisely, since we have put a maximum cap on the items that we want to buy.
It is good to park some money aside for recreation purpose too.
Everyone wants a good vacation once a year or twice a year. If you have bonus, that is good. If not, you still have the sum of money saved up for recreation.
Setting up a budget is actually the easy part. The tough part is to record all the expenses, and make sure that you live within the budget.
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These days, by far the tougher part of budgeting is ensuring that the incoming revenues are actually large enough to cover all of the regular expenses. That can be very difficult for many households, particularly among the web writing community.