Budgeting made easy with these budgeting tips!
Having a budget can help you feel a lot more in control of your finances and make better financial decisions. The trick is to figure out a way to track your expenses daily or on a more regular basis. Creating a budget can seem like a mammoth task, but not if you are consistent and follow these very simple steps.
Sticking to a practical financial plan does not always have to involve Excel sheets, maths, and the calculation of complicated formulas. It can be a simple pen-and-paper task that you can do every day and have your budget sorted for your month or even the year. So how to get started? What are some of the tips to make budgeting easy for you? Let’s find out!
- The 1st and foremost is to have a rough idea of what your income is going to be like. You can plan your budget only when you know how much money you will be making and how much your income be.
- The second would be to calculate your fixed expenses. This would include things like house rent or loans in EMIs, travelling expenses, groceries, and things like that which are regular and are also fixed (more or less).
- The third is to also make space for miscellaneous expenditures. This means setting aside a part of your budget of your income for expenditures that are not foreseen. Emergencies, medical conditions, or important travels can fall under this category. House renovations are another miscellaneous expenditure that can crop up from time to time.
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- Once you have set your income and your expenditures, the money you are left with should ideally go for your savings. However, whenever you’re planning your saving goals, make sure that they are realistic, which means that you should be able to reach that amount regularly.
- The next step is to make a plan- Once you have planned out your savings, income, and expenditures, make a plan and try to stick to it as much as possible. This will also help you take care of your priorities and spend according to them. The idea is to not overspend so that you do not overshoot your budget and are not in a position to save planning your savings.
- It’s very important to plan your savings according to your income and your risk-taking capabilities. If you are someone who cannot take risks then you should not indulge in trading or the stock market. For someone who wants a safer bet you can always go for some mutual funds or fixed deposits as these are secured and are likely to give you a good return and your money will also be saved. Putting money in the stock market can be rewarding, but if you do not track it regularly or don’t have enough idea about it, it could be disastrous.
- Another way to make investing in fixed assets like gold real estate is also a good idea if you can do so.
- Limiting your credit card expenditures- These days everyone has a credit card and this has made people very unaware or unconcerned about the money they are spending because having a credit card allows them to not worry about immediate payments. People spend a lot on the credit card without realizing the debt that is being collected. If you’re unable to pay your credit card bills on time, it is much worse for your credit score. So make sure that if you do have a credit card, you spend within your limits.
- Taking loans for big expenditures can sometimes be a better option than making a one-time payment. These days banks offer a lot of interest-free loans and these can help you get the house, car or electronics you want.
- Review your budget regularly! Having a plan does not automatically make financial planning all sorted. You must review your budgets often with changing incomes and expenditures. This will allow you to adjust spending accordingly and be more secure financially.
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