To be comfortable with managing a budget, the first step is to learn to live within your means. By doing so, you put the odds in your favour from the outset to succeed in taming the management of your finances. In addition, it is recommended that you put some money in a savings account every month. The amount you save will depend on your individual circumstances. A common range of saving is 10%-30% of your monthly income.
Budgeting Isn’t Easy
It is common to feel discouraged when it comes to budgeting. It’s tough to stay on top of your finances and spending. If you stick with it over time you will develop good habits and enjoy many benefits such as:
- A sense of achievement when you reach your targets
- A feeling of empowerment as you take control of your finances
- Less stress when it comes to finances
- You are more prepared for unexpected events
Repay your loans
In most cases, a focus of your budget is to pay off your loans. Banks often spread the loan repayment over several years by establishing small monthly payments. If you know that you are able to give more, do not hesitate to do it. This will save you from wasting your money by paying interest.
Organise Your Expenses
It is easy to underestimate the amount allocated to personal activities and shopping. A simple organisation of your expenses and considered planning allows for better control of these expenses. Over spending can lead to unnecessary stress on you and your family.
Here are some tips for avoiding over spending:
- Anticipate and allocate funds for unexpected events that may come up such as a car breaking down.
- Be aware of easy access to credit.
- Allow for some enjoyable activities within your budget. This will keep you in control and help you avoid splurging.
The basics of a good budget
Finally here are some quick tips for budget making:
- Set realistic financial goals. It is hard to be motivated if the goals you set are unattainable
- Calculate your expenses using your bills so you do not forget anything.
- Check and review your budget periodically to see where it is working and possible gaps between planned expenditure and actual expenditure.