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Showing posts from January, 2011

Budgeting and Financial Management

Budget is one of the very first topics in Personal Finance. Many may think budget is about control expenses but the true meaning of budget is to PLAN AHEAD . Although they may mean the same thing but actually it will leave a very different psychological effect. At one hand, one is focusing on 'expenses'. Controlling implicitly mean NOT to over spend it. This creates an internal conflict of "I want it but I can't have it". Whenever a control fails, its due to lack of discipline. The resolution is to control it better which is enforcing discipline. Enforcing discipline on a person who naturally does not have discipline is the internal conflict mentioned earlier. On the other hand, PLAN AHEAD would simply imply "I want it and I will get it". This is more target oriented and positive minded. Whenever a plan didn't materialize, one would have to plan better; as in "how else can I get what I want". This may further enhance one's cr...