It was rightly said by Warren Buffet that one must not save after spending, rather one must spend what is left after saving. Why is budgeting important? Because if you buy things you don’t require today, it is very obvious you’ll have to sell things you need later. In today’s world, instant loans are a common scenario because all of these are made easily available to the masses at the touch of your fingertips.
Technology has boosted everything and the convenience of these instant loans can cause more problems than providing solutions if not handled cautiously and with proper planning and budgeting.
Why is budgeting important?
Since budgeting enables you to create a spending plan for your money, it makes sure that you will always have sufficient money for the things you require and the things that are significant to you. Sticking to a budget or spending plan can also keep you out of debt or make you capable to work your way out of debt in case you are currently in debt.
Living on a string budget stringently
To obtain financial security all you have to do is surviving within your means. Sounds really simple and correct? Most of us have realised that this is a lot easier said than done. Living within your means is one of the toughest financial woes to tackle, but, it’s perfectly possible. Following a budget is very crucial, but even those who strictly follow a budget tends to slip off track. Here are certain warning signs that you need to be living on a tighter budget:
1) You struggle most of the days to pay your rent or mortgage
You just cannot survive easily by paying greater than 50% of your income as your rent or mortgage of your house or property where you reside. This is a sure shot recipe for a lurking disaster as you will soon be forced to eliminate other essential expenses like insurance and there’s also a higher risk of losing your home. If you will need to move to a more affordable home then move, it’ll pay off better in the long run.
2) You always feel anxious and stressed about money
If you’re not getting enough sleep at night or if you are unable to pay your simple daily expenses without a struggle, you are indeed facing money issues. Money problems can be extremely stressful. Financial stress is one of the most common causes of stress in today’s world of same day cash loans. It is easy for people to lose track of your budget and ignore sensible planning or budgeting. These easygoing offers tend to tempt you at the start and provoke you to take it casually. However, more often than not, schemes like same day payday loans and fast cash loans is a trap that makes you ignore your budget!
Thus, financial stress caused by them could later cause health problems for you. So, maintaining a tighter budget and sticking to it no matter what, will calm your mind and let you buy what you need when you need it!
3) You’re only able to make the minimum monthly payments on your credit card
You should realize you are in trouble when you start using your credit card to pay your other bills. Using your credit to pay off your bills is not actually paying off your bills but rather you are putting them off. By doing this, you tend to create a bigger debt for yourself. Furthermore, if you can’t pay your bills now, then you won’t be able to pay them later. This stands very true for paying the minimum threshold of the monthly payment. You are only paying off the interest and the balance tends to remain the same so essentially you are throwing away money that is not even with you. Instead, you could really use it in the future. It is recommended your usage limit should not exceed more than 30% of your available credit, any amount or level greater than that can affect your credit score. If you have a very high outstanding debt then this is a sign that you will need to cut down on your spending patterns.
A life without planning will never fetch you peace of mind. Planning is required even by big companies and small household to run their lives on a yearly or monthly basis. Therefore, it is important to know when you have crossed your line and entered into a tight budget zone. Prevention is better than cure and it’s anytime better to be safe than sorry. Therefore, you really don’t want your quality of life to get hampered so that you can pay your bills on the right time or become overworked trying to make ends meet. So, start examining where your money is going and try to plan and work on decreasing unwanted spending so you can actually take pleasure of what you have.