It is better to start from a less restricted budget and work with that and then determine if you can further restrict it. When you restrict yourself too much, and you find yourself unable to reach your budgeting goals, you may become frustrated and completely give up. You may find yourself even more tempted to spend money because you have restricted yourself so much. In some cases, you may try to restrict your spending so much that you are not allowing yourself to have any fun, or purchasing enough food to last you the entire month. While that is admirable, it is not the best way to go because you may set yourself up to fail. If you want to eliminate your debt, you may seriously consider eliminating certain items from your budget, or making the allowable amount small, so you can focus all of your money on reducing debt. It is important to make sure your budgeting goals are realistic. You may even be able to pay off your debt earlier than eight months, but keep in mind that this is an incredibly strict budget. With this aggressive budget, you can pay off your debt in the timeframe you selected. That means you must pay $1250 per month to get that debt paid. If you have $10,000 in debt, but you want to pay it off in eight months. You can adjust the timeframe in which you want to achieve your goal. If not, you may need to make some adjustments. Once you determine how much money you need, you can see if it fits into your budget percentage. Once you have your goals written down, it is time to determine how much money you need to make that happen. If you are referring to a past exam question or a question in the BPP Revision Kit then say which question and then I will explain. How Can Budget Percentages Help Me Reach My Goals? ‘Budget cost allowance’ is not a standard term, so it depends in what context the phrase is used. If that is your goal, you may want to use this type of budget. This is a much more aggressive budget to help you save money or pay off debt faster.
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