A family budget is a tool that helps you find out how much money you are left with at the end of each month (or whatever the period you employ). Importance of a family budget in financial planning is very significant. One may have less income but a steady surplus. On the contrary, I have come across many cases where the income is very high but a very little surplus at the end of the month. Overspending, excessive borrowing,… the reasons are many.
Even the best financial plan would not take off if there is not enough surplus. You will know the surplus only when you prepare your family budget. If you are planning regular investment methods such as Systematic Investment Plan (SIP), prepare your family budget before you start the investment plan. Ensure that you have even surpluses each month and commit yourself only to such an amount equal to your minimum monthly surplus and not ‘average’ monthly surplus. This way, your investment plan will not be distressed.
The Process of Optimisation 