Budgeting


Sometimes, it's easy to lose yourself in bad spending habits, like spending twenty dollars on lunch, or buying expensive movies you will watch once and never again. Its spending habits like these that can lead to something worse, Debt. Some debt is unavoidable, like a student loan which is an important invest and the debt is most often necessary, or a mortgage. However there is one source of debt that is avoidable but common and very costly, it being credit card debt. There is a solution however, and that is to have a good budgeting system to prevent unnecessary spending and prevent the accumulation of debt.
To make a budget, it's important that you first understand how much you make. For everyone it's different, because you must make a budget appropriate for your current situation in life. For example, if Mark is making 3000$ a month just out of school his budget will be different then Frank who makes 5500$ a month, and is preparing for retirement their budgets will be different from each other, because Frank will most likely be focused on saving for his retirement and will be able to spend more per month then Mark.
Things to include in the budget once you understand your own finances and how much you're making, are payments you must make. Mortgage and student loans are important and must be included in the budget. Also, basic living expenses which include groceries rent and utilities. Another important factor, which having a budget is good for, is for cutting down on wasteful spending, such as, eating out too much, buying too many clothes and other expensive habits that could lead to overspending and going into debt.
                                                                                       




Above is an example of a healthy budget. Although the saving might be lacking somewhat (this budgeter would want to attempt to free more space for saving) this is what a basic budget looks like, and if you decided to follow it, it will prevent you from going into unnecessary debt.
If you do still however find yourself in a tricky situation, such as your car breaks down and it will cost a lot to repair it, or you become  ill and you cannot pay the basic parts of the budget, the saving is an important part of the budget for these exact reasons. If you save a lot and have money saved up, you can work through these tough situations. Your savings should equal three months of income. If this is all factored in, you should have a healthy budget which will make you more financially healthy and keep you from going into unnecessary debt, while helping you pay off your necessary debt.