Making a budget and following it is an essential part of financial management. Doing this not only helps you keep control on your expenses, but also helps in achieving financial goals.
Smart financial planning is not just about saving, but it is a process that Which keeps your life organized and stress free. Come, let us know today how you can make your budget smartly.
First of all, understand about income and expenses.
How to make a budget It starts with understanding your income and expenses. Therefore, first of all make an accurate estimate of your monthly income. Do not just include salary in this income, but add all the ways in which you earn income and make an accurate estimate of the total amount.
After this, track your expenses. Before creating a budget, you should record all your expenses for at least a month. This includes rent, bills, grocery, entertainment, medical and every other expense that you incur every month. We are emphasizing on collecting this information because after this it will be easier for you to understand where the money is going and by reducing which expenses you can strengthen your budget. strong>Keep a goal
While making the budget, keep a goal regarding savings also. That is, if your salary is 30 thousand rupees, then keep a goal that I have to save 50 thousand rupees by any means in the next 6 months. By doing this, you will be able to plan your budget in a better way and at the same time you will also keep saving.
Adopt the 50-30-20 rule
Budget The rule of 50-30-20 must be followed while making. By doing this you can make your budget in a smart way. Of this, 50% is for essential expenses. That means essential expenses like rent, bills, grocery and medicine are included. Keep 30% for wishes. That means it is for your entertainment, travel or lifestyle upgrade. Keep 20% for savings and investments. This part is for future safety. This may include fixed deposits, mutual funds or other investment plans.
Resort to online apps
In today’s digital age, there are many ways to budget. For this you do not need to use your brain or do any calculations. There are many apps and tools available in the market that make it easy and organized. Like Money Manager, Khatabook, Walnut, or YNAB. Apart from this, you can also use bill tracking tools. With this you pay the bill on time. If you do not use technology much, then use Excel or Google Sheets.
Keep these things in mind along with the budget
While making the budget, you should also keep some money for things like emergency fund and insurance. By doing this, you are saved from those expenses which suddenly appear in front of you and wipe out your entire savings.
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