Step-by-Step Guide to Creating a Budget.

Welcome to the Saral Finance Newsletter where we talk all about finance in a most simplest way.

So, today Let us talk about the most important aspect of personal & professional financial management which is "Creating a Budget".It doesn't matter whether you are an individual, a business owner or any organization a well-designed budget can help you in a lot of ways.

But before jumping to the steps of designing the budget. I think we should understand what budgeting is. In layman's terms, budgeting is a process in which you carefully plan how much money to spend on something with all your available income sources.

Now why there is a need to create a budget? Here are a few points about why you should consider creating a budget:

1. Financial Clarity- Nowadays in the digital era, we frequently make a lot of payments through our UPI & credit cards. So, if you make a budget for your self it helps you understand where your money is going.
2. Goal Setting - It is quoted by Mel Robbins that "When you have a goal, your brain opens up a task list". Your goal can be anything like going on a dream vacation, investing, or paying off your debts early. A budget helps you with a designated path about how you can achieve those goals.
3. Stress Reduction - Many salaried employees face the issue of funds during their Month ends. A well-managed budget can relieve financial stress as it allows you to control your unnecessary spending.

Considering all the above benefits of having a budget let us dive deep into a step-by-step guide on how you can create a budget for you.

1. Assess your earning -?We will start with determining our total monthly income from all the sources like - Salary, Rental income, freelancing work or it can be any other income stream.
2. Track & categorize your expenses -?You can use bank statements, financial statements & other apps to get an idea about your spending habits. Then accordingly divide your expenses into various categories such as transportation, food & debt repayments as this will help you identify areas where you can cut back your expenses.
3. Set your financial Goal -??After analyzing your income & expenses define a financial goal for yourself it can be short-term or long-term Financial Goal. Having your goals will guide your budgeting efforts.
4. Monitor & Customize -??Your ultimate target should be to ensure that your total expenses do not exceed your income. Regularly review your budget to track your progress & accordingly customize your budget as per your requirements.
5. Save & Invest -??Building a great portfolio by investing wisely can help you to secure a financial future. So, try to develop a habit in which you can on time to time basis invest your money.

As it is quoted by Jim Rohn "Motivation is what gets you started. Commitment is what keeps you going". Similarly creating & following a budget requires commitment but the reward you will get in return is entirely worth it. Budgeting is the foundation for achieving your financial freedom.

If you have any budgeting tips, success stories, or questions related to creating a budget, please share them in the comments below. Let's support each other on our financial journeys!