Budgeting Like a Pro
July 25, 2023
DD Planet
Budgeting is essential for meeting financial goals since it gives you an idea about the money you have, how much you can spend and what needs to be worked out for correcting the anomalies.
Here are the tips and advice to help you budget like a professional:
- List down all your income.
- Define the period of your budget. Generally, it is on a monthly basis but you can always have separate monthly and annual budgets.
- List down all your expenses, the ones that you’re incurring right now and everything else that is likely in near future during the budget period you’ve defined in step 2 above.
- Find out your savings goal by aligning it to your long-term goals such as your own house, children’s higher education and so on. List your financial priorities.
- Deduct your expenses calculated above from your accumulative income from all sources including any interest incomes.
- If the resulting figure from the step above is not enough to meet your savings goal (at least the ones that are in your priority list), tweak your budget by reducing certain expenses from your lifestyle spending that can easily be dispensed with.
- If you’re into the habit of overspending, watch out for the expenses that you incur on credit cards et cetera and limit your debts by paying in cash.
- Do not forget to allocate money for meeting emergencies.
- Track your money regularly. Make it a habit to do it at least twice a week, if not daily.
- Be flexible but not too often. Take a cue from ‘Making and balancing a household budget’ article to learn some minute tricks.
