2nd Part

Understanding Budgeting and Saving

Budgeting is simply a plan for your money. It's a way to track your income and expenses so you can see where your money is going and make sure you're spending it on things that matter to you.

Key Concepts:

Create a Budget: The first step is to track all your income and expenses for at least a month. Use a spreadsheet, an app, or a simple notebook. Categorize your spending (e.g., rent, food, transport, entertainment) to get a clear picture.

The 50/30/20 Rule: A simple budgeting rule suggests you allocate 50% of your income to needs (rent, utilities), 30% to wants (hobbies, dining out), and 20% to savings and debt repayment. This helps you balance your spending while still building your financial future.

Start Saving Early: Even a small amount saved regularly can grow significantly over time, thanks to compound interest. Make saving a priority by setting up an automatic transfer from your checking account to a savings account.