Budgeting: Benefits & Tips on How to Budget Your Own Money
Budgeting is very challenging. It needs self-discipline and perseverance. It is a dynamic process that needs regular checking over a period of time. Once you have a better understanding about it, and get started the idea, you will really love doing it.
Here are some tips on how to make use of what you make:
· Don’t spend more than what you earn. This is the idea that most people usually take no notice of. They are living beyond their means. If you are spending in excess of your income, then you need to borrow money to pay your expenses. This is only a short term strategy that can lead you to a long term problems if it happens every month.
Make listings of all your expenses like house rent/mortgages, utilities, food/groceries, clothing, vehicle payments, credit card debts, insurance, etc., and try to balance your income against your expenses.
· Have more control.Take control over your financial situation. If you have spendthrift friends, learn to say “No” sometimes if you’re being pressurized by them. Saying “no” is not an indication that you are a miser. You may need to prepare excuses on why you cannot go out with them all the time. Spend only on things that you really NEED. It is you who knows how much you have in your account and not somebody else’s. So, be responsible.
I have friends end up in jail because of their credit card debts. They lack control of using it and certainly don’t know how to use it wisely. Mostly professionals have been hooked with these situations; they overlooked the risks of having too many credit cards. They sink into these debts and find it very difficult to recover.
· Let credit cards or extra cash out of reach. It is really enticing to spend when you are carrying extra cash (fun money) or credit cards in your wallet. If you limit the cash you put into your wallet, it will help you control your spending habits.
· Pay Yourself. Aside from paying your monthly expenses, do not also ignore the idea of paying yourself. Whatever amount of money you got at the end of the week or a month set aside a portion of it for your savings, retirement or investments. A little sacrifice today can protect you against insolvency tomorrow.
Once you plan and make your personal budget, try to evaluate on a regular basis whether or not it is in the right track. If you see a negative result after subtracting all your expenses in a month from your monthly income, it means to say, you have a budget deficit and you need to work on it next time. If you have a left over, then it is an indication that you’re having control of your finances.
I started practicing this idea of budgeting when I got a job after college. I was able to manage my own finances and I really love doing it.