Does Your Household operate on the Annual Budget?
If I ask you the above question than what will be your answer? Do you have an on paper record of your consumption spending accroding to various categories such as food, clothing, entertainment, mobile phones and other categories?
Most of the people don’t have this record. This is because most of the people never plan any budget. But yes, most of the wealthy people plan their household budget according to category wise every month.
Now what about those wealthy people who don’t plan any household budget?. Well, according to the study they control their spending by creating an artificial economic environment of scarcity for their all the family members.
What they do is, during the starting of the month, they Invest 15-25% of their Income for long term before doing any other expense. And after that they spend rest of the money behind other things. This is known as “Pay Yourself First” Formula. By doing this, it will automatically set a discpline in their lives and over the time they become wealthy.
Thus, Budgeting is very important exercise that everyone should do. I know that many of you find budgeting very boring because there is nothing exciting in budgeting. In that case, you should go for “Pay Yourself First” Formula. Simply invest 15-20% of your monthly income for long term investments during the starting of each month and create the environment of financial scarcity for you. This will impart a discipline in your life.
But in any case, Budgeting and controlling your expenses is the MUST exercise. If you want to become rich and wealthy than you MUST know that where each Dollar goes from your account every month.
If I ask you the above question than what will be your answer? Do you have an on paper record of your consumption spending accroding to various categories such as food, clothing, entertainment, mobile phones and other categories?
Most of the people don’t have this record. This is because most of the people never plan any budget. But yes, most of the wealthy people plan their household budget according to category wise every month.
Now what about those wealthy people who don’t plan any household budget?. Well, according to the study they control their spending by creating an artificial economic environment of scarcity for their all the family members.
What they do is, during the starting of the month, they Invest 15-25% of their Income for long term before doing any other expense. And after that they spend rest of the money behind other things. This is known as “Pay Yourself First” Formula. By doing this, it will automatically set a discpline in their lives and over the time they become wealthy.
Thus, Budgeting is very important exercise that everyone should do. I know that many of you find budgeting very boring because there is nothing exciting in budgeting. In that case, you should go for “Pay Yourself First” Formula. Simply invest 15-20% of your monthly income for long term investments during the starting of each month and create the environment of financial scarcity for you. This will impart a discipline in your life.
But in any case, Budgeting and controlling your expenses is the MUST exercise. If you want to become rich and wealthy than you MUST know that where each Dollar goes from your account every month.
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