Five reasons why a budget is important
A budget can help you manage your income and spending because it makes it easier for you to see where your money is going and where you can save on expenses. And if you decide to allocate a certain amount of money each month to savings and investments it provides a guide to help you stick to this, which simplifies your money matters. 

The difficult part of a budget is sticking to it and there can be many reasons why a budget isn’t working for you. It’s important to know what works for you and what doesn’t to manage your money well.
 

Five reasons why it’s important to have a budget and what you can do to make yours work for you.
 

1. Set and track your goals
   This will help you organise your finances. Just like the envelope method, you organise what will be paid to who and when. By setting financial goals for yourself you can save or invest to grow your money or pay off your debt sooner if your budget allows for this.
   
   
2. Helps you to not overspend
   A big mistake that many people make is that they spend more than they can afford. That’s why a budget is so important, as it will show you where you overspend so that you can address this before it gets out of hand. Your budget should include every cent you spend to ensure that you get a clear view of your spending habits and where you need to cut down on spending.
   
   
3. Helps you save and build wealth
   With a budget, it’s easier to include savings and investments in your monthly financial responsibilities. By drawing up a budget, you can see where you can save money and pay that money into a savings account or an investment account.
   
   
4. Helps you set up an emergency fund
   One of the biggest ways that your budget can go wrong is when there’s an emergency. No one can anticipate when these emergencies occur so, as part of your budget, you need to build funds for when a disaster strikes.to worst. Similar to savings and investments, you’ll need to make a commitment to putting away money for a rainy day.
   
   
5. Helps you save for specific goals
   A budget that’s goal-orientated will help you grow your money. If you have something specific that you want to buy or if you want to go on holiday, you can set up a savings account for this to save until you have enough money to reach this goal.
    

You need to make sure that your budget is a true and honest reflection of your finances, otherwise you’re setting yourself up for failure. You’ll have to review your budget and pinpoint what you’re doing wrong to fix it. If your income is less than your expenses, you’ll need to look where in your budget you can make cuts. If loans and credit cards are taking most of your income, you’ll need to call your debtors and renegotiate your payments so that you can survive the month on your income.

Want to know more? Here's what to do:
 

• Contact your wealth manager.
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DISCLAIMER
This information is for general information purposes only and is not legal advice.