Creating a monthly budget for your finances is essential to being money-wise. If you’re a person who finds it difficult to maintain a successful budget, we’re here to help.
Creating a monthly budget for your finances is essential to being money-wise. If you’re a person who finds it difficult to maintain a successful budget, worry no more. Here are 6 incredibly smart ways to maintain a watertight budget.
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Track your expenses
It is common for monthly budgets to get derailed because they are not managed well. It is important to note all your expenses for the month and then see if it tallies with your income. If you’re a technology enthusiast, use a handy mobile app to keep a tab on your expenses.
For all those who are not comfortable with technology, here’s a more traditional way to track expenses. Use different envelopes and put various amounts of money in each one, for utility bills, school fees, insurance premium, entertainment and so on.
Streamline your spending
Follow the 50:30:20 rule to allocate your income. Put 50% of your money away for necessities such as your groceries and utility bills. Set aside 20% of the money to clear any debts and save. The remaining 30% can be earmarked for entertainment. This will help you streamline your finances.
Skipping deadlines? Bad idea
Automate your payments with an ECS mandate from your bank. This way payments for all your investments will become hassle-free. Missing deadlines will become a thing of the past.
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Leave your Credit Card at home
If you can’t resist shopping, banish your Credit Card from your wallet. Constantly swiping your Credit Card is detrimental to your budget. You may have the latest phone or electronic gadget that you wanted, but your budget is in a soup because you didn’t stick to plan.
Prepared for small emergencies
Everyone has their bad days. Sometimes your car will break down without warning or you might need to suddenly visit a friend who lives out of town. It would be a good idea to have a mini-emergency fund of about Rs. 15,000 to cover unexpected expenses. This should be separate from your primary emergency fund.
Additional Reading: How To Put Together An Emergency Fund
Get the best deals
Don’t forget to do your homework when you need to buy anything. Regardless of whether you’re looking to acquire a loan, Credit Card, home appliance or flight tickets, make sure you try and grab the best deal available. You will certainly save money in the bargain.
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Pretty simple isn’t it? All you need to do is keep these 6 tips in mind and ensure you stick to them so your budget remains as watertight as possible.