** Introduction**
Many businesses have collapsed like structures erected with poor quality materials. At first these structures look like they will thrive because of how glittery they are. But as time progresses the real deal sets in. Factors that were not considered during construction like the soil texture, land topography, poor quality control would start acting up and affect the structure leading to its collapse. Many businesses today thrive within the first and second year of its existence, but due to some factors the business will accelerate in the opposite direction. Some do not have sales books, not to talk of credit or debit records. Some spend extravagantly with the intention that they will always make sales and replace whatever amount they spend. Little do they know that they are feasting on their capital. When unforeseen financial shipwreck sets in, their business sinks in as if it never existed. One reason may be responsible for this-poor Budgeting.
** What is Budgeting?**
Budgeting is defined as making a plan of how you spend and manage your resources. At large it involves money. It includes ascertaining your income, setting financial goals, investments, setting money aside in case of unforeseen circumstances, payment of bills and setting funds for saving.
Financial Health
This refers to an overview of a person's financial strengths or the bloodline of an institution. It touches different areas when it comes to financial management. It is an integral approach to managing funds. Striking a balance between what you earn and how you spend. This will prepare one for unexpected financial circumstances.
Budgeting is a primary requirement for achieving and maintaining financial health. It serves as a blueprint that affects the meaning of financial health. Budgeting is a prescient measure to managing funds. It plays a vital role in maintaining a financial well-being by ensuring debt reduction, savings and responsible expenditures.
How to Make Budgets
Know Your Income: Calculate how much you earn. This includes money you earn be it salaries, side hustles and so on. Also include how much taxes you pay.
Set Goals: Set financial goals you wish to attain within a period of six months or a year and make definite arrangements to reach them.
List Your Expenses: Make a list of all your expenses. Identify which ones that you cannot do without and expenses that has alternatives
Set Funds Aside: Allocate a certain amount of money that would comensurate each category of expenses you made. Make sure funds are set aside for essentials.
Review and Revise: At intervals review your budget. This would be very helpful when there is a change in your income flow.
Advantages of Budgeting
Expense management: This allows you to set a good scale of preference when it comes to expenses. It also allows you to channel funds to more assets than liabilities.
Managing Funds: Budgeting helps you define your income and expenses which allows you to manage your finances meticulously.
Managing Debts: Debts as it were has its own advantages. However Budgeting identifies how you can manage phones to pay back as and when due which will reduce avoidable borrowing.
Savings And Investment: Proper budgeting helps you decide a specific amount of your income that will be saved or invested which will contribute to your financial growth. By keeping a set amount for savings within the budget, individuals are more likely to set money aside regularly which will increase financial growth
Emergencies: Unexpected expenses occurs as a result of health issues, burglars, fire out breaks etc. Budgeting allows for setting funds aside for these situations. This funds kept for emergencies serves as a backbone of financial potency. It also acts as a reserve which would protect the financial walls from collapsing in the case of unforeseen circumstances.
How Budgeting Stabilizes Financial Health
Budgeting maintains a balanced financial health by:
Encouraging savings and investment: Sticking to a budget encourages savings for investment It helps to create a conducive environment for future investment.
Reducing debts: Extra funds could be set aside for paying off debt faster and reducing the risk of paying accumulated interests due to not paying as and when due.
Financial Discipline: A holistic approach to budget fosters financial discipline, regulates what is spent, ensures responsible expenses and encourages healthy saving habits.
Decision making: Budgeting provides a ground for making calculated financial decisions with regards to choice of investment based on available resources.
Curbing Overspending: Budgeting helps to identify areas where funds have been spent unnecessarily. It also makes room for taking positive steps to curb such unnecessary expenses
Conclusively, just like poor quality control and poor quality materials makes a structure collapse, so do businesses sink on their sail without budgets.
**What is HIVE? **
According to leoglossary
Hive is a web 3.0 ecosystem that is designed to utilize the technologies that are projected to usher in the new era of the Internet. This was started in 2016 with the code being written by Dan Larimer. It was the next evolutionary blockchain he put forth after creating Bitshares.
**Credit **
first image gotten from pixabay
Second image gotten from Pixabay
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