The newspapers across the country are filled with articles and stories on budget. Many of them are sharing their comments on what they think about the budget and many others are analysing the benefit or the loss behind this budget. This is for our entire country. What about us? Do we make a budget for ourselves within which we can live or do we simply spend money just because we earn it?
A huge chunk of the younger generations today, especially the middle class have emerged to have more privileges than their parents had. The middle class of the last many decades have earned this privilege and the benefit is being enjoyed by their children. This means that children from middle class families -who are earning money, but do not need to contribute to their parents and they themselves do not have a family of their own- are free to spend their own money. Another section of people need to support their parents right from the start and the affluent obviously have enough assets/financial resources and so petty financial concerns do not bother them as much.
However, irrespective of your age, economic status and circumstances, it is important to have a budget. A budget is literally your financial discipline. It makes you plan and execute successfully without putting you through losses or unprecedented situations. In this blog, we bring to you some easy tips to plan your budget.
- An analysis of the past
The first factor to pay attention to, when you plan your budget is to understand what went wrong in the past. Look through the bills of the previous month, see where you have spent more. It could be due to increased purchases or a trip you took or anything else. This is totally subjective. But going through the expenses of the past can give you a deeper insight on what is the right approach to have, for example if you have spent too much money on purchasing clothes in the previous month then you can plan on regulating it accordingly this month. At the end of the day it is about understanding our pattern of expenditure and tuning it.
- Regulating Costs
Usually we face situations where we realise that we have overspent on something. This happens when we do not regulate our costs. A budget will surely help you not fall prey to such situations.We have to remember to decrease or increase costs in your budget based on your previous spend. If we do not regulate costs, it will become difficult to manage our savings and money will drain away due to lack of planning. Further, regulating costs to meet your budget is a live exercise and it cannot be decided once a month alone.
- Savings is also a part of your budget
Many of us, especially youngsters, have a feeling that savings are secondary. We have to remember that our priority is to save first and then spend later. So savings should definitely be a part of your budget. The amount you intend to save is totally at your discretion. It could be maybe 20% of salary or more based on your monthly expenditure. Savings comes handy especially during an emergency.
- Hire a Financial Advisor
We live in times where our expenses are growing exponentially. The cost of commodities is skyrocketing. So, we might know our finances very well for drafting our budget. However, it is very essential to have input from a financial advisor, who will guide you through your finances and help you invest your money in the right places. They will help you draft a budget that ensures the best of your interests at a given time.
- Fulfilling our long term dreams and aspirations
This is the best benefit of having a budget. Your budget should recognize your short term and long term goals and it should enable you to meet them successfully. Your financial goals are to be achieved. The purchases you wish to make can be made through a carefully planned budget. This could be purchasing a home or buying a car or even starting a business of your own. A carefully planned budget will eventually lead you towards success.
We are living in times where the cost of living is rapidly increasing. In a situation like this it is imperative that we follow a well planned budget to not just meet our expenses but to ensure stability and a secure future. Go ahead and make your budget now!