What is budgeting?
In short, budgeting is the process of saving, borrowing and spending. It is organising your finances to provide yourself with a clear understanding of how you manage your money for the short and/or long-term. Budgeting can be complex or quite simple depending on what you are trying to accomplish.
Budgeting can be used for numerous objectives, from saving to purchase something, to getting out of debt or for investment purposes. Budgeting is important because it allows you to understand the ins and outs of your finances. Explaining “what is budgeting?” can be difficult as it has so many different purposes, although it always comes back to the organisation/understanding of finances for a financially driven purpose.
Below are links to some great budgeting tools
Money Smart Budget Planner
A free online or downloadable(excel) budgeting tool to help manage your finances
Community First Budget Planner
A quick and easy tool for assessing your financial position.
Budgeting is one of the most useful and powerful tools for managing money and is one of the key processes for successful wealth creation. It allows you to understand in advance, what you can or can’t afford, or how long it will take you to afford something. In addition, it can allow you the ability to rearrange expenditures or savings to work for you and without guessing.
Lastly, budgeting is for everyone, whether rich, middle-class, poor, young or old. There are no background requirements for creating and using a budget. A good budget will allow you to make informed financial decisions. Help in times of crisis, get the most out of your hard earned cash while minimising bad purchases. It can also help in the planning of big life decisions such as going to university, purchasing a home, getting married, starting a family, retirement, etc.
As simple as it might appear, trying to provide a general response to “what is budgeting?” is more difficult than it seems. Please feel free to provide your own response or idea on “what is budgeting?” below in our comments section.