When you understand the purpose of a budget, it becomes clear why routine reviews are necessary. you need a budget review Importance of Reviewing Your Budget Establishing a true budget will allow you to see where every dollar is spent and track the progress of financial goals. Other categories or “jobs” include savings, emergency fund, vacation fund or any other financial goal you are working toward. There will be areas in your budget which provide for entertainment, spending, dining-out, clothing, and your grocery budget. Some jobs might be paying bills while other jobs might involve investments. A balanced budget means you have assigned a job to every dollar. You should never have to say to yourself “ I can’t pay my bills.” When you have finished making your budget, there should be neither deficits nor surpluses. The real purpose of a budget is to assign each available dollar to a specific place. In reality, the purpose of a budget is not to restrict spending or to tally up income versus expenses. Others envision a list detailing how much money you have from your paycheck compared to the number of bills you have to pay. Some people find the concept of budgeting to be restrictive and unnecessary. Purpose of a Budgetįor each person, the word budget has a different meaning. And if you haven’t even created a budget yet, don’t worry. If you haven’t reviewed your budget lately you may want to think about doing so soon. This lack of attention to the very basis of all financial matters can result in costly mistakes in the long run. We may tweak the budget if we remember a change or make the occasional adjustment, however few people take the time to really sit down and review their budget on a routine basis. Ironically, many of us have the tendency to set our budget and move on to bigger and better things. The budget is the foundation from which all other things relating to your personal finances are built. An often overlooked tool in managing your personal finances, the basic budget is where it all begins, so you need a budget reivew.
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