Budget is the one word most of us ignore in our daily lives. Whether it is a question of spending a few dollars on weekly laundry bill or moving in to a new house; most of the time people react impulsively and give attention to the instant need of the hour rather than spending according to the available resources. It is all right to make a few instant decisions considering the severity of the situation, but it should never be the usual practice in the financial matters.
If you are looking for solutions to the financial problems that keep you, awake at the middle of the night, Financial Planning is the solution. If someone is looking for a healthy and happy life, it is important to consider the money spending habits and tracking down the areas of improvement.
It always pays off to follow a ‘self made’ expenditure plan, rather than taking help of a software available in the market in order to avoid financial instability in general.
To simply manage your budget, you may keep the following tips in his mind:
· Shortlist all the most essential (almost fixed) expenditures, like house rent, electricity and phone bills. Keep aside sufficient amount of money to meet those requirements without any delays.
· Make a list of the regular items like grocery, cigarette, car rentals etc. and allocate the required amount under each separate head.
· Any special occasion like birthdays, anniversaries etc. need special planning and save in advance, in small amounts, for those specific purposes.
· Review your past credit card bills and find out the instances of unnecessary expenditures. It is always advisable to keep the credit card usage at the minimum and only for the most essential purposes.
· Make a list of those items, which you think are necessary, but need sufficient cash or credit to purchase. Make a pool of money for such items and save monthly or weekly as much as you can.
· Save or invest as much as possible, at a very regular interval.
· Also, make a buffer pool, which will take care of any unplanned or emergency expenditure. Move the unspent amount to the savings account.
· Under each separate head, allocate your budget and on every occasion, you must know under which head, how much you are spending.
· Keep a daily cashbook and update the short and big amounts you spent through out the day. On weekends update your budget with the spent amount under each head and you may plan the next week(s) according to the balance left.
· Avoid paying interest on credits at any cost.
The financial plan may be for a long term or a short term depending on your choice. However, it is better to have a plan than not having any. As no one can understand your needs and personal goals better than you can, it is the best thing to make yourself your own financial adviser. Spend a few hours weekly with your hard earned money and see the difference.