One of the first steps in your journey towards financial security and independence is to start budgeting for all your expenses. Having a budget is a must for each and every person who aims to become rich and amass wealth over a period of time. In the book "Millionaire Next Door" , the author comes out with various traits that rich millionaires share between them. And the most common of them was the fact that they all had a strong ethic of making a monthly budget for all expenses and then sticking to it. The study also noted that most of the people who earn a fat salary but are not wealthy also share a habit between them. And that was that none of them had the habit of preparing a budget for themselves.
Budgets help you in number of ways like
1. It helps you get an idea of your necessary and non-necessary expenses.
2. It tells you the areas where you need to cut down on expenses.
3. Helps you deploy your money effectively and efficiently.
4. It helps you get the habit of saving going.
5. It helps you keep a tab on impulse expenses like eating out etc.
So, the moral of the story is that you must have a monthly budget of your household expenses and income if you don't have one already. For those of you wondering how to get started on it, please refer the video below. Gives you a nice idea about how you should have your budget. People who prefer to make budget on paper can do so by using the same concept.