The importance of the personal budget to avoid debt

Today, there are many people who work and look forward to the end of the month to collect their salaries, as the expenses were emerging from the reality, which is why it is necessary to make a personal budget and thus does not have this type of problems.

In this case there must be a record, which may be a notebook or a page in Excel. You should be aware that the budget is not rushed. You have to take a few minutes to think about what you’re going to record. For that you will need to know that your family budget will have two large fields (income and expenses).

In that budget should record all money received from any source and how often it arrives, so you must specify in your registration form if it is fixed or variable income.

The next step requires great care and discipline, if it will not be the end. As in the previous case, fixed costs must be identified and then the variables and extras.

Fixed expenses are house payments, utilities, education, among others. Within the variable expenses are food, toilet cleaning, useful and extra expenses spent on those holidays, outings to the cinema or theater. From here, you can start calculating everything goes through your pocket and out of it.

Therefore, if the expenses are greater than revenue it is warning sign, as if exceeded for several months, it is common to assume debt to cover the difference.

In this case, there is only 2 ways out of the problem that are cut variable costs or extras or increase revenue. As the latter is more difficult, you have to resort to setting, without neglecting the fixed costs that can bring more debt.

Finally, many experts recommend that debt by monthly credits should not exceed 30% of income, so try not to order anything on credit, since those interests then become unaffordable if not within the budget.

People who are aware, always make a budget so that at the end, do not build them problems.