Budgeting

In economics, we have the term " scale of preferences " and this economical term refers to a list of unsatisfied needs arranged in chronological order of priority or importance. This list of prioritized desires gives rise to the need of implementing decision-making through the act of budgeting. The most pressing needs are usually ranked first followed by the less pressing ones.

This economical term aids individuals to make rational choices. It leads to efficient utilization of limited available resources. Budgeting encompasses the scale of preference with a calculation plan to execute those listed wants from the highest ranked to the lowest of them all. Budgeting helps strategize plans.

Every individual is an economist because they perform those tasks in their daily lifestyles. If one doesn't make a budget there's a huge tendency that such individuals will live their life carelessly without the apprehension of economizing.

It's quite obvious that human needs are insatiable. That is a reason one should adopt a pattern or formula of budgeting because, in that way, there will be a dwindle in excessive wants which are normal. If the minimalistic approach is applied this will help curb and tackle the frequent additional items in the budget list.

With the current financial situation of my country, every individual and their family is experiencing recession and is coerced into a thorough budget due to economic imbalances. Failure to negate this would result in meaningless expenses.

~ How I Make My Budget ~

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In making a budget, I have learned to be very precise and decisive. Although as I shared earlier if we don't apply the minimalist approach we might end up emptying our bank accounts for unnecessary unplanned expenses. Thus, I will share with you how I make my budget.

[1] Exercising and Implementing plans - This requires your utmost and sincere processing of ideas. The human mind can be tricky at times, so it is required to pen those lists of needs or wants down and prioritize them in a manner that won't be altered till the full execution of all. In this way, I can also detect the advantages and disadvantages that benefit me more. My goals and ambition aren't exempted from this.

[2] Allocation - Another tip on how I make my budget is by allocating the cost of an item listed in the scale of preference. It's also compulsory to assign a certain amount of money to them with some extras in case of fluctuation of prices in goods and services. In this way, you know the budget and stick to it.

[3] Ascertain Income and Expenses - Streams of income might be in a monthly or a weekly package. For sure I know how I get my money but knowing how to spend it is another thing entirely. A friend of mine @princessbusayo shared content about an application she uses to track her income and expenditure which is a good strategy I am also using. The payment is my "income" and a portion of it set aside for the execution of my scale of preference is called "expenses" and the remnants are the "savings". Spending beyond income isn't advisable and it's very good to have savings despite the expenses. In this way, I get to minimize and maximize if the case may arise the possibility of those wants.

[4] Reviewing my budget - There's no way I would make budgets and not review them. In doing so, I can have the slightest opportunity to delist an item based on my thorough contemplation. I can list another item which all depends on what I obtain from it or the urgency it requires to fill.

[5] Executing my budget - It is time to carry out those things listed in my scale of preference one after the other. I am so careful to not go outside what I listed because that would be an extra expense. If I can't execute them all, the remainder should be rolled over to the next list and those would be less ranked items.

~Factors I Consider When I Budget~

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There are certain criteria in which making a budget is considered -

Availability of goods and services - Before I make a budget, I try as much as possible to make sure that the items are available because if they aren't, it could change the whole course of everything planned.

Price of goods and services - In the current situation of my country, the price of essential goods and services is inflating. So when making plans, price consideration should be paid attention to, and if possible, an additional amount should be added.

The size of my goals - Knowing fully well that my goals and objectives require resources to make it work, understanding the capacity will help me decipher the number of resources (time, money, and energy asf) to put into it.

Income size - Without income all this evaluation is meaningless. So first of all, consider the amount of inflow of income before mapping out plans for this. With the income, I can determine the amount I will use to carry out my list of needs.

Seasons - This also plays a role in budgeting. My budget preparation may fall into one of the two seasons: the wet season (summer) is normally from April to October and the dry season (winter) November to March. Aside from this, there are times I make plans for Christmas too. You know the drill!

Thanks for reading my piece🦋🦋

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