Happy New Year 2025!

Do not earn money and just spend it without a plan and a budget. Regardless of how much you earn or the extent of your needs; it is necessary to plan and budget for your income. Spending without a plan or a budget, leads to risky, impulsive and extravagant spending.

A budget is a plan of your finances for a specified period. It helps one figure out how much they earn and then plan how to spend it. It helps one allocate their earnings to specific activities and keep track of spending. 

A budget may be weekly, monthly, quarterly or annual. It is best guided by your earning cycle. If you earn a daily wage, plan and budget daily; if you earn weekly income, plan and budget weekly; and if you earn a monthly income, have a monthly plan and budget. 

A financial plan on the other hand is the broader look and consideration of your financial picture over a period of time. It is therefore crucial to look at your finances from a broader perspective, set financial goals and put strategies to achieve those goals in the medium to long term future. Financial planning is setting financial goals and putting strategies to achieve them. 

Happy personal budgeting!