The Budget Talk — Part 1

How do you feel when you don’t have enough money to do or have things you want? Pretty frustrating right.

Going about your business in life without having a budget is synonymous to looking for a friend in Lagos without proper information regarding the route to take. While both can be accomplished, the result is usually expensive or wasteful.

Many people view budgeting as restraining; restricting them from what they want but think about it, why wouldn’t you want to be in control of your expenses?

What is a budget?

A budget is the process of creating a plan to spend your money — emphasis on your money. This plan helps you monitor your inflow and outflow. The essence of having a budget is to improve your financial health and meet your financial goal.

Why is budgeting important?

Now look at Dangote, Otedola and Alakija. do you think they have a budget? Don’t overthink it because they do. There is no successful business around the world today that does not believe in having a budget.

There is a general complaint by some people who claim they can’t create a budget because of the economy — they can’t ascertain how much they would spend. A typical example is the Lagos story. A city where transport fare is determined either by the weather or the mood of the higher-ups at the park. Instead of focusing on whether fares will go up or down, you have the knowledge change is constant when it comes to transport. The question is simple, where does your money go?

· Do I really need that premium Netflix subscription even with my limited time (8 am - 5 pm)

· Premium gym membership — just one visit in a month, no difference in shape but the debit keeps rolling in

Benefits of budgeting

· Reduce stress — your financial health is 100% assured

· Aligns priorities — enables you to work towards major goals

· Grows savings — you get to have that much needed financial buoyancy

· Accelerates Financial goals — whatever you need to save up for, you get to achieve major financial goals

· Acts as a roadmap — gives you a visual representation of expenses

Be real with your budget

The main goal is to make sure your income helps in all aspects. That is, even after paying necessary expenses, you still have some money left-over for your own flexibility — miscellaneous.

The kind of budget you choose can be dictated by many factors including your long-term goals, your age, expense, and current living situation. The key is to find a system and break down what works for you.

Review your plan every month. Adjust it as your income and expenses change.