Everyone has a budget: a government, a business, or an individual.
So how do you budget your money?
There are only two ways to budget your money:
- Budget Deficit
- Budget Surplus
A Budget Deficit is when you do not plan well and spend more money than you make. This could also be that you fail to plan and instead rely upon yourself to guesstimate about how much money you will need for your bills on a monthly basis. If you run your finances like this, you’ll be in a world of hurt.
A Budget Surplus is making a conscious decision to pay yourself first by including in your expenses the payment you need to make to yourself every month. Budgeting in this way ensures that you have money that you are setting aside for yourself in order to build your asset column. This makes you more accountable for your expenses and makes you live on whatever is left over, instead of trying to save whatever you have after paying your bills.
Budget for a surplus : you’ll be glad you did! Use the money you set aside to build your asset column to increase your passive or portfolio income. This may take time, but have patience. Continue to invest in yourself and your financial education in order to make it happen.
