Budget Your Money, Yes this is what we are going to learn about today, so far we have learnt about Financial Mantras like Paying Yourself First, Paying Off your Debts and Build Passive Income today we are going to start with another financial mantra that states that Budget your money to become rich.
Budget Your Money
Budget estimates the income and expenditure for the particular period of time, let's see what Google says,
It is basically what counts your Income and Expenditure, let's discuss how these two Income and Expenditure can form your own budget.
There are mainly two types of budgets, you must know where you fall and what you create.
Types of Budgets
The two types of Budgets are,
- Budget Deficit, and
- Budget Surplus
Let's study them individually...
Budget Deficit
The definition of budget deficit goes like this, "Excess of spending over income." this means if you have your spending's more than the money you are earning then you are creating a budget deficit over a period of time and this thing won't let you grow rich in your life.
Budget Surplus
The definition of budget surplus goes like this, "Excess of Income over spending." this sounds the best thing right? it means you are left with some money with you over a period of time, hence you are creating a budget surplus now instead of increasing your spending it's time to invest in income generating assets to grow yourself rich.
Now, for the people who are creating a budget deficit over a period of time you need to make out some plan and start creating budget surplus instead of deficit, if you want to grow rich in your life.
Let's make a plan for you...
Make a Plan
The Plan is very simple as we discussed in our Financial Mantra #1 - Pay Yourself First, so to get out of the budget deficit and enter into a budget surplus start with Paying Yourself First.
Now, How to do that?
Simply, Just Start with putting 30% aside from all your income's for yourself, use that 30% to spend on Tithe, Save and Invest. Yes, start spending 30% of your income in tithe, saving and investing.
After that you will be left with 70% of your income to pay all other expenses.
I was unable to pay my expenses with 100% of my income then how will I manage it with 70%?
I was sure that you will get this question in your mind, well that's where you have to find many more ways to earn more money to pay off other expenses but if you want to get rich then you can't ignore paying yourself first.
So, start with 30% and increase this as soon as your budget starts in surplus by earning more money every minute, every day and every month.
Bottom Line
Having a Budget Surplus is very important, make sure if you are creating budget deficit right now then start making plans to earn more money and get out of that and start creating budget surplus and give priority to spend money on tithe, saving and investing this spending's will help you grow rich rather then making you poor like your other expenses.
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