You will say that you know where and how you spend your money and you do not have to write down every thing to keep track of it. But you are wrong, allow me to throw you a challenge. Just keep account of every cent you spend for a month.
You’ll be stunned at how big the small expenses become when you add them up. Take the sum of an amount you exhausted on just one unessential thing for the month, multiply it by 12 to get the total of the money you spent in a year and now multiply this total by 5 to get the amount you spent on this unnecessary item in 5 years .
That is the amount of money you could have saved and deposited in a bank and earned interest on it in just five years. That is why it is very important to have a budget.
If we aim at getting control of the little expenses that in reality do not effect us in general and we can live without them, we can succeed in achieving financial freedom.
The small affairs actually do matter. Bringing down your expenses on lunch from ten dollars per day to seven dollars per day on every working day for the five days that you work in a week saves $15 a week… $60 a month… $720 a year… $3600 in five year and if you add interest gained on it, it comes out to be substantial amount.
You can clearly figure out how important is to cut down on your expenses. It truly is the small thing and you still eating the lunch each day and that was just one thing to spare money in your day-to-day living without doing one thing you actually require. There are numerous things you can target and control to cut down expenses if you really look for them.
Make a particular long term plan as well as some short term goals. There is nothing wrong in planing your life and setting goals. If something is important to you, then it is important, that’s it.
If you would like to be capable of making a deposit on a house, save money for your children to put them in a reputed college, buy a new car, go on a holiday and anything else, then that’s your ultimate goal and an important reason to manage your finances and that is why you need a budget.