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Uploaded by: euinvest100 on Jun 3, 2012
Darwin Horan- What Does Budgeting Mean?
Improving Your Credit Score
Using a budget means developing a system where you pay your bills on time and you make at least your minimum monthly payments. By adhering to these activities, you will start to improve your credit score. Developing an organized and efficient way to pay your bills will also reduce the chances that you will have to pay monthly penalties and late fees to your credit accounts. A budget can also allow you to prioritize your credit accounts and pay them off one at a time.
Developing a plan to spend your money each month will help you spend your money wisely and maximize your value. When you use a personal budget each month, you can plan on where your money will go and track your spending. You can then use that data to analyze where you spend the majority of your money and alter your budget to ensure you are getting better value for necessities. For example, you may buy your morning coffee on the way to work at an expensive national coffee shop. A look at what you are spending on a cup of coffee for a month will probably prompt you to make your own coffee and spend that extra money elsewhere.
A comprehensive personal budget compares all of your income against all of your bills and expenses. When you are done figuring your budget each month, you will know exactly how much you can apply to savings. Having a budget means knowing how much you can set aside each month for an emergency spending fund, a vacation fund, a holiday spending fund and any other savings events you prefer. It means that you have complete control over how you allocate your money for future needs.
Projecting for the Future
Having a personal monthly budget means being able to see how future purchases and changes to your spending habits will affect your financial situation. It means that you have a planning tool that you can use to determine how you should proce