Having a budget is the only way to ensure that you have enough money that will work for your goals. You might want to buy a house or plan for the higher education of your kids. Remember, retirement is one of the goals that you are saving for. The only way to build one is to invest money on a regular basis. The only way to prepare for that is so build a retirement corpus. It helps you lead a happier retired life: Retirement may seem far away but a day will come when you will stop earning but your expenses will continue. If you have used up any of it, you should make it a top priority to rebuild your emergency fund. So your budget should have a surplus that goes into creating an emergency fund of six months of your expenses. Emergencies come without any prior warning and it is harder if you do not have the monetary cushion.

This can save you during emergencies like a job loss, a medical emergency like an unexpected illness. You are prepared for an emergency: As we saw, the only way to have a surplus is to spend less than you earn. So, if required, you can take steps to spend less money on these things and put the money elsewhere. If you have been spending a considerable portion of your income eating out or buying clothes or anything else, a budget tells you where the money is going.

Having a budget ensures that you know where the money is being spent. For this reason it is rightly called hard-earned money. Know where your money is going: Most of us work all through the month for a single paycheck. If you create a budget and stick to it, you can avoid this. Spending beyond your means or spending money you do not have, especially through a credit card is a recipe for disaster. You can spend on these, but only so much. A high-end gadget bought on credit card EMI or impulse shopping are some of these. But there are so many ways you may end up spending money.

Even if it is equal, you do not end up saving any money. If it is more, you will face a financial crunch every month. It helps you live within your means: Your expenses need to be less than your income. Here are five reasons why you must have a budget: Without a budget, you will have no idea where your money is going and you cannot plan your finances. Kolkata, February 5: Even as we analyse the Union Budget and what it means to us, it is important to remember that just as India or any other country needs a budget, each one of us do so too.

Reasons why you need a budget