Congratulations! You have successfully created a monthly budget. The next step is what many people find tough - staying on track with the budget. We understand that sticking to a budget is easier said than done. So we have compiled simple and smart budgeting tips that will help you with your expenses and stay on track with your money.
Know the Difference Between ‘Needs’ and ‘Wants’
Needs are basic expenses like paying rent, bills that help you live and work, while wants are expenses that you can do without like dining out, going to the movies etc. So it is important to not to overspend on your wants and stick to the amount you have budgeted for. Take care of your needs first, save enough and then spend on your wants.
Set a Realistic Budget
It is easy to get carried away while you are budgeting for a month but the key is to set a realistic budget. For example, if you feel you might overshoot a 10k budget by one or two thousand rupees, then set a budget of 12k and try to stay under that amount. Gradually, you will get a clear idea of what and how much should you budget for exactly.
Set Detailed Financial Goals
Setting clear, detailed financial goals can help you to achieve them easily. You might want to save up for marriage or pay off all your debt - a clear cut financial plan can help you fulfill all your financial goals.
Track Your Spending Habits
Do you spend as soon as you get your salary? Do you feel secure about your finances? Do you often indulge in impulse shopping? Knowing your attitude towards money and keeping a track of your expenses is key for creating a good budget and sticking to it.
Save First, Spend Later
Creating a budget doesn’t mean that you have to necessarily spend all the money. If you feel you can save up on certain expenses, then do so. Creating a ‘save first’ habit will help you in the long run and keep you financially healthy, especially during a crisis.
Try the 50/30/20 Budget Rule
As per the 50/30/20 budgeting rule, 50% of your income must go towards your needs (rent, groceries etc), 30% of your income can take care of your wants (shopping, dining out etc) while 20% of your income must be saved. If you are struggling to create a good budget or are unsure of how much to allocate where, you can follow this rule.
Use the Right Tools to Create a Budget
Use digital apps like Wizely to create and track your monthly budget. This way your expenses and savings will be up to date and you will be able to exactly know where and how you spent most of your money.
Cut Expenses, if Necessary
Lastly, in order to stay on track with your expenses, you might need to trim and cut certain expenses. Maybe a gym membership you don’t use anymore or a magazine subscription - carefully review your expenses and chop off the unnecessary ones.
Following a budget diligently ensures that you always have some money for things you need and want. A budget allows you to stay debt-free and keeps you financially healthy in the long run. So make sure you stick to it!
