Budgeting is a spending plan that helps you see if you have enough to pay for what you need and what you’d like to do. Budgeting also helps you save for things you will need to pay for later, such as bills, payments, and everyday needs. It’s basically a control plan for crazy spenders that don’t think of the quality but go for the quantity and continue to consume useless items without the money to pay for them.

Step one for budgeting: Take into account of how much money you receive. It’s the basic starting point and foundation to start your spending.

Step two: Since you have the big picture, it’s time to do some subtraction. With your income amount start subtracting the amounts you need to pay such as bills, up for soon and what payments are coming up or even getting the needs like toiletries, hair products, skincare, new clothes, and groceries. It helps with saving and your mind will eventually create a habit to just store that money until it’s needed.

Step three: Since we have out the leftover amount from saving for the payments and bills, now it’s time for spending on leisure right? Well, yes. But spending with a purpose. This is when economics gets involved like an opportunity cost.

You wouldn’t want to spend all the money that you have in one go now, but in amounts that’ll last you. Opportunity cost is understanding that if you pick one thing over another you will know the types of benefits you’ll be getting out of it. You wouldn’t want to spend one thousand dollars on Gucci shoes when you could’ve spent it on new decorations or something useful you’ll benefit from-not just something that’ll keep out on display without purpose.

Budgeting to me is a way for a person to start becoming smart with their money and that makes a huge difference in your personal economy.