Budgeting and cash flow

A budget is a financial plan that tracks your income and expenses over a specific period. It helps you manage your money, avoid debt, and save for future goals.

Core Components

• Income : Total money you earn or receive.
• Fixed Expenses : Regular costs that rarely change (e.g., rent).
• Savings : Money set aside for future needs.

Main Purposes

• Control Spending : Prevents overspending on unnecessary items.
• Track Progress : Shows exactly where your money goes.
• Reach Goals : Helps you fund vacations, emergencies, or retirement.
• Reduce Stress : Provides financial security and peace of mind.

Popular Budgeting Methods

• 50/25/25 Rule : 50% needs, 25% wants, 25% savings.
• Zero-Based Budgeting : Every single rupee is assigned a specific purpose.
• Envelope System : Cash is divided into labelled envelopes for categories.