Since our needs are unlimited and at the same time resources are limited, it is always advisable to keep an eye on spending to avoid facing the tribulations that follow after our spending limits are exhausted. This is where the role of the budget comes into play! Keep reading for a detailed look at why budget management is important especially if you are a student studying abroad.
What is a Budget?
In simple terms, a budget is a plan created to manage income and expenses effectively. A budget helps one to monitor his/her expenses and spend accordingly, without going overboard.
How do you make a budget?
Making a budget is not as easy as it seems. It requires proper monitoring and analysis to create the most effective budget based on each individual’s earnings. You can start by writing down your fixed expenses such as rent, food, clothing, electricity, transport, etc.
You must deduct this amount from your income at the beginning of the month. The remaining amount can be used for recreational purposes such as partying, exploring, watching movies and whatever suits you best. If you want to save for a specific goal that you have in mind, you can just as well deduct this amount in instalments from your monthly income and set it aside untouched.
Why should you make a budget?
Well, budget management is important for every individual to live a smooth-sailing, organized life. For those of you planning to study abroad or already pursuing your dreams abroad, here’s why creating a monthly budget and managing your expenses is of utmost importance to you.
1. Make sure you survive
Living in a foreign country, and pursuing your further education can already be stressful. The rush of managing all your expenses that were always taken care of, under the tutelage of your parents, can be overwhelming, especially when you no longer have support to rely on. In such a case, it is wise to prepare a budget well in advance and prepare for the month ahead, so that you can balance your income and expenses without regrets afterwards. Well, it’s always better to be safe than sorry, right?
2. Start saving
Loved that dress you saw at the store? Looking for great sunglasses? Fancy a meal at that fancy restaurant? All your wishes, your needs and desires can be fulfilled in a jiffy with a well-managed budget. When you manage your budget, you monitor your spending, which in turn results in savings you never thought possible.
Apart from this, with a goal in mind, you can always enjoy those moments of desire by adjusting your budget accordingly. An effective budget can never let you down, you just need to plan in advance and mark your moves accordingly. Whether it’s saving the day or satisfying that expensive urge, you can be the master of your destiny!
3. Avoid unnecessary expenses
Oh! The taste of freedom is sweeter than anything you can imagine, isn’t it? As you live in a new country, freely explore the city, try new cuisine, endless shopping, nightly performances and parties are sure to follow. But without keeping a check, you never know when these expenses will escalate, not only making you regret burning that hole in your pocket but potentially leaving you broke as you eagerly await your next payday. As a young person, though mature to some extent, you may have a tendency to lose track of your spending. Keeping a budget allows you to enjoy the fruits of life, all within a limit, allowing you to draw the line where necessary.
4. Ability to invest your money
When you create and plan your budget in advance, you pave the way for benefits in your life in a short period of time. Whenever you are faced with the option of investing your money in a place that can prove to be an advantage for you, don’t think twice and opt for it. Because budgeting encourages savings, you will always be able to move forward in life to a better destination.
Whether you invest in a course to sharpen your knowledge or experiment with learning to gain practical insight, you can always get started with a well-planned budget.
5. Organized living
Honestly, our life revolves around money. There is no good life without a constant flow of money. Now wonder, if you have used up all that money, your life will surely get messed up, especially if you live in a foreign country.
Creating a budget and following it religiously will never stick and will help you stay organized any time of the month. It is rightly said that one stitch in time will save nine! Likewise, being prepared with a well-defined budget will help you avoid all sorts of nasty situations, ensuring a farmer, focused and memorable experience abroad.
6. Avoid the debt trap
When faced with a situation where you are low on money, the only solution that comes to mind is to resort to borrowing from your friends or family. This loan amount creates a vicious cycle of repayment that may or may not end depending on the amount you wish to raise.
Either way, debt is best avoided, especially if you live abroad and are pursuing your education to improve your life. So, how does a budget avoid the debt trap? A budget helps you plan ahead, keeps you on track, avoids excessive spending, and at the same time creates savings that will never land you in the ditch. In fact, through effective budget management, you might as well be able to lend money to those who choose to live their lives without budgeting.
Basically, if you live abroad or anywhere else, budget management should be your top priority when it comes to managing money for a happy, safe and joyful life.