Most people think of budget surplus and budget deficit in terms of money. However, Robert T-Kiyosaki, author of the book “Increase Your Financial Intelligence,” has a different perspective. According to him, budget surplus and budget deficit refer to your mindset.
In this blog post, we will discuss what that means and how it applies to your personal finances. We will also look at some lessons from his book that can help you improve your financial situation!
What Is a Budget Surplus in Personal Finance?
A budget surplus is an excess of income over expenses. In other words, it’s when your savings exceed your monthly spending. In other words, it’s when you have more money coming in than going out.
A budget surplus can be a good thing or a bad thing, depending on how you look at it. If you have a surplus, it means you’re living below your means and saving money. This is a good thing because it means you’re on track to reach your financial goals.
However, a surplus can also be a bad thing if you’re not using it to improve your financial situation. For example, if you have a surplus but you’re not investing it or using it to pay off debt, then it’s not doing you any good.
Why Is a Budget Surplus Important?
There are several reasons why having a budget surplus is important.
First, it allows you to build up your savings. This can give you a cushion to fall back on in case of an emergency, or it can help you reach your financial goals faster.
Second, a surplus allows you to pay off debt. If you have high-interest debt, such as credit card debt, paying it off can save you a lot of money in the long run.
Third, a surplus gives you more flexibility in your budget. For example, if you have a surplus of one month, you can use that money to buy something you’ve been wanting, or you can save it for a rainy day. Having a surplus gives you options that you wouldn’t have if your budget was in deficit.
What Is a Budget Deficit In Personal Finance
A budget deficit is the opposite of a surplus. It occurs when your expenses are greater than your income. This can happen if you have high levels of debt or if you’re living paycheck to paycheck.
In general, a budget deficit is a bad thing. It means you’re not saving money and you’re likely to fall behind on your financial goals. Additionally, a deficit can lead to more debt if you’re using credit cards to make up the difference.
Why Is a Budget Deficit Important?
Even though you may consider a budget deficit a bad thing, there are some situations where it can be helpful. For example, if you’re trying to pay off debt, a deficit can help you do that. If you have a lot of high-interest debt, such as credit card debt, paying it off quickly can save you a lot of money in the long run.
You may not be able to go out shopping for new clothes or take vacations when you’re in a deficit, but it can be a helpful tool for getting your finances back on track.
If you’re constantly in the red, it can be a wake-up call to change your spending habits. A budget deficit can also motivate you to make more money. If you’re always struggling to make ends meet, it can be a motivation to get a better-paying job or to start a side hustle.
Budget Surplus = Abundance Mentality
When your mind is focused on a budget surplus, you will be thinking about how to make more money rather than cutting back. This is the abundance mentality. You will always be looking for opportunities to make more money. This can be done by thinking about how to negotiate a raise or earn more sales.
The budget surplus mentality is focused on increasing your financial intelligence. You will be constantly learning about money and how to make it work for you. This can be accomplished by reading books, listening to podcasts, and taking courses on financial planning. You will be looking for ways to invest your money so that it can grow.
Budget Deficit = Scarcity Mentality
If your mind is focused on a budget deficit, you will be thinking about how to cut back on expenses. This is the scarcity mentality. You will always be looking for ways to save money. This can be done by cutting back on unnecessary expenses, such as dining out or buying new clothes.
The budget deficit mentality is focused on tightening your belt. You will be looking for ways to save money so that you can make ends meet. This could mean cutting back on your retirement savings or taking a second job. You will be focused on survival rather than growth.
This can be helpful in the short term, but there is only so much money you can save. After a while, the law of diminishing returns will set in and you will find it harder and harder to save money. The scarcity mentality can also lead to anxiety and depression.
Focusing on Assets Accumulation Rather Than Making Ends Meet
The best way to overcome the budget deficit mentality is to change your mindset. Focus on abundance rather than scarcity. Look for ways to make more money rather than save money. Invest in yourself and your future. Learn about money and how to make it work for you. When you change your mindset, you will change your life.
One way to do this is to take Robert T-Kiyosaki’s book “Increase Your Financial Intelligence” and apply its lessons to your life and personal finances. This book is full of great information on how to make more money and how to invest it. It will teach you how to think like a rich person and how to become financially intelligent.
How Planning For a Budget Surplus Can Create Financial Freedom
When you focus on a budget surplus, you open up a world of possibilities. You can start to think about how to make more money and how to invest it. In addition to this, you can begin to accumulate assets that will create financial freedom. Lastly, you can change your life for the better and achieve your financial goals.
A budget surplus is the first step to creating abundance in your life. It is the key to unlocking your potential and achieving financial success. If you want to be financially free, start by planning for a budget surplus. It is the foundation of a healthy financial life.
For example, rather than spending 10 hours each month trying to save 10 dollars on your grocery bill, you can spend that time earning an extra 100 dollars. Which would you rather have: an extra 100 dollars or save extra ten dollars? The answer is clear.
Budget Surplus vs. Budget Deficit – Summary
Are you trying to save money each month but find it difficult? You may be using the wrong mindset. Instead of focusing on a budget deficit, focus on a budget surplus. This simple shift in thinking can change your life.
The terms “budget surplus” and “budget deficit” are often used in government spending. However, they can also apply to personal finances. By understanding these two terms, you can gain insights into your own finances.