Question

What is budgeting (in the context of personal financial planning) and how does it serve your overall financial health and long-term financial plan?

Answer 1

Budgeting is planning of individual income and expenditure and it is the forecasting of uses of individual income in the manner to fulfill the individual expenditure with a view to save for future.

Budgeting is a process in which an individual will be trying to utilise his income in optimum manner and he will be trying to meet with his expenditure so that he can also try to save for his future expenditure.

it is serving our financial health and long-term financial planning by helping us in saving more and it will also help us in effectively utilising our income towards our expenditure and it will help in saving for the emergency time, so that we can proactively manage our finances in a better manner and we will strive towards financial independence because we will always constantly synchronising our actual expenses with the forecasted expenses and we will try to eliminate additional expenditure and we will try to generate additional income in order to save more for the future so that it would be overall helpful in better management of the finances and gaining a financial edge.