One of the leading causes of bankruptcy is the failure to plan for life’s unforeseen circumstances. Short term unemployment, reduced income, injury, or a brief illness are some of the common events which often result in the inability to meet debt obligations.
A good budget will take into account such things as savings, debt repayment, recreation and the everyday necessities of life. Maintaining a budget requires discipline as expenses must be tracked on a monthly basis and the budget must be adjusted to ensure that expenditures are in line with net monthly income.
The result, however, will be financial stability. A carefully detailed budget can be the best tool to create concrete spending plans, allowing individuals to achieve their short and long term goals and to greatly reduce the stress associated with financial setbacks.