Budgeting is the foundation of personal finance and the most powerful tool to allocate money. In keeping to a well-designed action plan, you will never end up living beyond your means. Yet, most people ignore income management and find themselves in debt.
People whose income fluctuates from month to month are concerned most. Don’t know how much you’ll earn this time around? This is also stressful! Budgeting could help you cope with the stress. How could you manage expenses if the most important variable, this month’s income, is missing? Amazing budgeters have found a way out: they calculate based on what they earned last month.
Getting one month ahead is an efficient money management strategy with huge benefits:
- It takes much of the stress out of your budgeting. You become relaxed because you have a financial cushion to pay the bills.
- This budgeting plan enables you to stick to and benefit from the main principle of personal finance: ‘spend less than you earn’.
- Getting one month ahead means you create a realistic zero-sum budget. You rely on facts and numbers, rather than forecast your future spending.
- It helps keep track of your expenses and avoid living paycheck to paycheck. You can analyse your previous purchases to see which were reasonable and which were a waste of money.
- Budgeting one month ahead stimulates you to save a bigger share of your income. By saving, you reach your financial goals faster and enhance abilities to live a debt-free life.
With such overwhelming advantages appearing, one-month-ahead planning is quite simple to stick to. Here are three main steps to taking this path of reasonable budgeting: