Budgeting is the start of creating a financial plan for yourself. It is the foundation to see your financial position. Understanding how your money or income is being spent is very crucial to saving and growing your wealth. Budgeting is outlining your income and expenditure monthly. For example, listing your fixed costs (rent, utilities, mortgage payments, debts, insurance, etc.) and your variable costs (food, car maintenance, clothing, etc.), total your full expenditure and then minus the amount from your income, this will give you a net amount you are working with on a monthly.
Note that budgeting isn’t all about restricting what you spend money on and cutting out all the fun in your life. It’s really about understanding how much money you have, where it goes and how to allocate those funds best. A good budget plan can help you keep track of your spending and control spending to satisfy your financial needs. With this approach, it is easier for you to save for the future. Save at least 10% of your salary to put towards your retirement plan and other investment portfolios.
If you are working with a small net amount after your expenditure, it means you should look into ways to increase your income. Therefore, you need to make more money.