Planning makes it possible for you to live within your income, save money for short-term goals, and reduces financial worries and stress in the household.
Everyone faces the necessity of ensuring that current income is adequate to cover expenses - a task otherwise known as making ends meet. Those with spending plans are in a better position to balance income and expenses because of their overall view of the situation. Some non-planners go through cycles of feast and famine - spending money when they have it and doing without when it is gone. Taking control of current cash flows leads to peace of mind and greater success in achieving financial goals.
Steps to Develop a Plan:
Draft a monthly spending plan (income and expenses):
Record regular income
Record your expenses
Balance the Spending Plan:
If the plan does not balance, you should review each category and determine your ability to either decrease expenses or increase income
Implement the Spending Plan:
If you are unsure of your expenses, create a draft plan, track your spending, compare the estimate versus actual and make the necessary adjustments.
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