Updated: Feb 28, 2022
A budget is a financial plan for a set period, usually a year. It greatly enhances the success of any undertaking. Budgeting makes saving money easier by indicating how much money should be set aside for each category of costs, with the remainder going into a savings account. A budget can create the foundation for setting goals, monitoring accomplishments, and planning for alternatives in addition to assigning funds. Budgeting is beneficial to everyone, not just those who are financially struggling. Consider a budget as a stepping stone toward your financial objectives.
It is recommended, for simplification, to follow the 50/30/20 rule as a simple budgeting framework i.e. :
Allow up to 50% of your income for needs.
Leave 30% of your income for wants.
Commit 20% of your income to savings and debt repayment.
Budgeting is actually supposed to be simple. If not, it is a habit difficult to follow. And definitely, a habit one can not afford to miss.