Describe The Budgeting Process

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Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating a budget allows you to decide in advance whether you will have enough money to do the things you need to do or would like to do. If you don't have enough money to do everything you would like to do, then you can use a planning process to prioritize your spending and focus your money on the things that are most important within your own life. This planning process will help to decide what you need to pay for and what you would like to do with the extra. Also, it allows you to set aside money that you might use throughout that month with extracurricular activities or just eating out occasionally with friends.
Since budgeting allows you to create a spending plan for your money, it ensures that you will always have enough money for the things you need and the things that are important to you whether that be something that you enjoy or something that you need. Following a budget or spending plan will also keep you out of debt or help you work your way out of debt if you are currently in debt as long as you develop tips that will alter your spending habits. Tracking your spending is essential to managing your budget. If I had …show more content…

What budgeting actually does is clearly show you how you split up your money and present you the choices on what stuff to enjoy and would like to do based on your financial limitations. It will save you the sadness of overspending and leaving you with too many deficits. Budgeting does not stop you from enjoying stuff though, it only insures that you enjoy stuff when you want it and not have to go in debt purchasing it. You avoid spending unnecessarily on items and services that do not contribute to meeting your financial goals. If you are working with limited resources, budgeting makes it easier to make ends meet especially if you have troubles

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