Being a homemaker is hard work. To make things easier, here are some budgeting tips to help you save money and manage your expenses.
For a lot of Indian women, many things tend to change after marriage. You move into a new home and you have a household to run, sometimes single-handedly. And money is, of course, an integral part of all this.
Typically, it is the women of the family who handle the household expenses. However, this is certainly no easy task. Indian girls usually live with their parents before marriage and it is quite possible that they may not have any idea about running a household or coming up with expense budgets.
Additional Reading: A Superbly Easy Way To Keep A Budget
If you find yourself in a similar predicament, this is where we come in. We’ll tell you how to formulate a budget for your household and ensure that you save a tidy sum at the end of every month.
Interested? Read on!
It is always advisable to start with a simple budget. For this, you first need to make a list of your monthly expenses. You need to include even the smallest expenses, such as the amount you pay every month for your newspaper subscription for example.
Here, you need to make a distinction between essential expenses and non-essential expenses. You can track your absolute essentials, such as groceries, with approximate costing. If you know where you are going to make those essential expenses, you can use accurate costing.
For instance, if you buy the same set of items every month at the same shop, you will know exactly how much they will cost. If you feel that it is not possible to write down an accurate figure, take a month or two to observe the expenses incurred for your household.
You can note them down as and when they are incurred and arrive at an average cost, which you will have to bear every month. You can even ask your husband to chip in with his views regarding how certain expenses can be handled.
You can figure out your non-essential expenses the same way. These are expenses that you can do without but generally, don’t. This includes money spent on movies, dining out etc. This is where you can save a lot of money. Prioritising your non-essential expenses is even more important than prioritising your essential expenses. You can save a ton of money by doing this.
Once you are done, you will be all set to make your budget. But remember that it is best to keep essential and non-essential budgets separate. This will help you see which category is tipping the balance in case you exceed the budget that you are setting.
Additional Reading: The Dos and Don’ts of Budgeting
Making The Budget
Once you are done listing out your expenses, you need to choose a budget format. You can make a simple budget with pen and paper, but that may not be the right way to go about it. Preparing a manual budget and comparing figures every month can be a time consuming and cumbersome process.
If you aren’t particularly internet savvy, start with a simple excel sheet. It will be easy to put in columns and jot down the numbers. You can even make charts and diagrams to represent your budget. This will help you interpret your budget better. You can even make out spending patterns well.
However, if you happen to be tech-savvy, there are a multitude of options available online for you. Check out all the free online budgeting software tools that are currently available with a simple Google search. Some even allow you to integrate your Savings Account into your budget so you don’t need to jot anything down. The transaction figures will be automatically pulled from your bank statement.
However, ensure that such programs are safe before you opt for them. They should have good encryptions so that your data remains secure. If you are a smartphone junkie, you can consider money management apps. These apps can help you jot down expenses instantly instead of depending on your computer. Some of these apps could slow your phone down, so check the app out before you decide to use it.
Once you are done creating your budget, you need to keep reviewing it at the end of every month. See if there are any unaccounted expenses. Ideally, you should have accounted for every single expense. Categorise as many expenses as possible so that you don’t end up with a bunch of them slotted under ‘miscellaneous’.
Your budget estimates should tally with the actuals. Remember, making a budget is fairly simple, but sticking to it is the hard part. For higher savings, you not only need to stick to the budget, but you also need to ensure that you have a decent surplus at the end of each month.
Additional Reading: Lame Excuses People Give To Not Start A Personal Budget
Stick To The Plan
The common budgeting mistake that many people make is underestimating their expenses. Keep in mind that your essential expenses after marriage will most likely increase. If both you and your spouse are working, but your salaries aren’t enough to meet your monthly household expenses, you may need to adjust your non-essential expenses to make sure that your budget is on track.
Here’s how you can go about it:
- Small is the new big – Making small changes in your lifestyle, can help you increase your savings in the long run. Be a smart homemaker who makes a substantial difference to your monthly expenditure.
You can do this by tracking discount offers, buying in bulk, reducing energy consumption by alternating between gas and induction cooktops etc. Keep an eye out for discounts on household products or hit the movies during the middle of the week when the ticket costs are lower than on the weekend. It’s the simple things that matter over time.
- Cash is king – Swiping your Credit Card for every purchase may be easy, but you could run up a big bill at the end of the month. You will also lose track of how much you are spending. By using cash or your Debit Card, you can help control your impulse purchases.
This way you will see your account balance going down, but it will help you keep your expenses in check since you will only be able to spend what you have. Remember, Credit Cards are the most expensive form of borrowing. Interest rates can range between 18% to 24%. It is best to pay off your Credit Card balance every month so that you don’t fall into a debt trap.
Additional Reading: Help With Credit Card Debt
- Making merry at home – We all love to have fun during weekends. Young, married couples love to go to the latest movies and try out exotic dishes at new restaurants. However, this means high non-essential expenses.
To help you save, you could use Cashback Credit Cards or Dining Credit Cards to cut down on eating expenses. You can also use coupon websites that provide deals on meals. The same is true for movie tickets. You could try a single screen theatre where tickets are cheaper or you could reduce the number of movies you watch at multiplexes.
The simplest solution is, of course, watching movies at home. With so many movie portals available online for a nominal fee, you could rustle up some popcorn and watch the latest flicks in the comfort of your home.
Additional Reading: How To Save Money On Movie Tickets
- Cut the calls – Mobile phones are an essential and sometimes inescapable part of our lives. However, you could cut down on your phone bills by switching from a postpaid connection to a prepaid one, or by making calls through free applications like Skype or Whatsapp.
Additional Reading: All About Linking Aadhaar To Your Mobile Number
- Invest as soon as you have money – As a homemaker, you could do well to divert any surplus funds into investments that could help your money grow.
These investments could serve a backup, just in case you and your family fall upon tough times. With the right investments, your money could grow over the years, enabling you to accumulate a substantial contingency kitty in time.
If you are looking to invest every month, consider Equity diversified Mutual Funds where you can invest using a Systematic Investment Plan (SIP). If you are not the risk-taking type, you could stick to Fixed Deposits (FD).
Give your investments time to provide you with the right returns. Note that the power of compounding can help you build a sizeable corpus in the long run. Consider this: An investment of Rs. 5,000 per month invested at a rate of 12% per annum for a period of 35 years will fetch you more than Rs. 2.75 crores by the time you retire.
So, start small and step it up as you go along. You can share your monthly budget plan with your financial planner who might tell you how to save more and where to invest. Ideally, you should be linking your savings to your financial goals such as buying a car. This will help you reach your goals quickly.
Additional Reading: Ask The Right Questions Before Investing
Who said a homemaker only cooks and cleans? Show your spouse how much more you can do for the family by following these simple budgeting tips.