0:01 Hey guys, my name is Daniel from Financial Literacy Australia, and today we're going to be talking about the importance of budgeting So have you ever wondered why making a budget is essential?

0:13 In its simplest form, a budget is a plan for your money. So, it's a tool that lets you know how much money you'll have and how much you need to allocate for certain things.

0:25 Imagine having a map that guides your journey and helps you avoid getting lost. That's what a budget does.

0:32 For your finances, making a budget is incredibly important and ensures you have enough money for everything important to you, like food, your house and other essentials.

0:46 A well-planned budget acts as a safety net. They protect you from overspending and things that you might not necessarily need. But how does a budget help you exactly?

0:57 It clearly shows what you can spend your money on. So, by having a clear image, you can see where you might be overindulging and where you can make cuts.

1:09 More so, a budget helps you save money for future needs or even wants. That can be like a new vacation, a holiday, a gadget, or an emergency fund.

1:20 Now, you might be asking how to make a budget. It's a lot simpler than you think. Firstly, you need to know how much money you're bringing in.

1:29 This could be money from allowances or any other form of income that you have. You can make a list of all your monthly expenses.

1:39 This includes costs like rent, bills, water, gas, groceries, and other variables like entertainment and eating out. Once you've got these two, you subscrap- subtract your expenses from your income.

1:56 And if you've got money left over, that's good. You can allocate things towards fun activities or saving or even other, you know, essentials.

2:06 If not, you might need to adjust. So next is sticking to your budget. Sticking to your budget might not be the most challenging part, but it's not impossible.

2:18 Try to follow your budget every month or every week. Sometimes, you can do it daily. If you notice that you're overspending, take a moment to think about what you can change for the following month.

2:31 Now remember a budget isn't set in stone; it's flexible, and you should be able to adapt to your current situation.

2:38 Now, to wrap it up. Making a budget is a central tool in managing your finances wisely. It gives you a clear picture of your income and expenses, hel, ps you avoid unnecessary spending, and allows you to save for things you want in the future.

2:57 It's like a financial road map guiding you towards financial freedom. So don't underestimate the power of a well planned budget, it might just be the tool you need to achieve your financial goals.