The National Bank of Moldova (NBM) disseminates informative and educational materials on how to manage the budget, increase revenues and reduce expenses. The publications are part of a national financial education campaign carried out by the central bank and the Independent Think Tank “Expert-Grup”, IPN reports.
According to specialists, the personal budget fulfills two functions. The planning function allows setting and pursuing financial goals, while the control function is the one that shows how much, on what and when the money was spent. The budget can be of three types: deficit, balanced and surplus. Deficit budget is when spending is higher than the income. The budget is balanced when spending is equal to the income and surplus budget is when the spending is lower than the income.
Experts consider it is normal to have a deficit budget, but only for a short period of time, for example when a person collects money and buys a car. However, it is dangerous if the deficit is persistent because one can run out of savings and can even accumulate debts.
In order to have a surplus or balanced budget, a record of incomes and expenses should be kept, maximizing income and optimizing expenses, planning to achieve the financial goals.
Specialists divide income into stable, temporary and occasional. Stable income is the salary, scholarship or interest. Temporary income is seasonal work or participation in a project. Occasional income is in the form of gifts or prizes.
One can increase the income by learning a foreign language or a programming language. In order to optimize the expenses, the expenses that are optional should be reduced and those that are mandatory should be rationalized. Optional expenses are those that fall, for example, into the “vices” category. Financial planning is when one saves during a period when there is surplus income for a period when there will be larger expenses. This way the short-, medium- and long-term financial objectives can be achieved.
According to the NBM, it is recommended to set aside a portion of stable income in order to achieve financial objectives. Occasional income can be allocated for attaining priority objective. The important thing is not to let money lose its value due to inflation and to invest it.
The materials will be published on the communication platforms of the National Bank and “Expert-Group” on Tuesdays and Fridays in the coming weeks.
