Basics of Budgeting
Budgeting is the deliberate, advance version of the personal income statement introduced in Topic 6 — a plan for where income goes, rather than a record of where it went. This guide covers the basic four-step process: tracking actual spending (made easier by digital transaction trails from UPI and cards), categorising it using the fixed/variable and essential/discretionary lenses from Topic 6, planning targets informed by your broader financial goals, and reviewing without judgment to refine the next cycle. The key structural point: treating savings and investments as a planned budget line (ideally automated via SIPs) rather than whatever happens to be left over after spending — with the emergency fund as the first priority. We close with a brief look at tools — spreadsheets, apps, and the envelope method (and its digital “pots” equivalents) — with the central point that the best tool is the one you’ll actually keep using.