To live within your budget requires strategic planning
Impulsive and compulsive spending has been a major reason most people overshoot their budget, which usually leaves them battling with their finances.
A lot of people spend their money unwisely because they do not have good knowledge on how to manage their finances, making them go into debt that will, in turn, become difficult to manage and cause financial frustrations.
Budgeting implies planning. However, bringing a plan into fruition requires self-discipline. No matter how much your Gross income is, if you did not plan and budget well, you will end up living like you are earning nothing.
Such lifestyle has left a lot of people penniless. One thing to consider when spending unwisely is: what if you get laid -off? Is there anything left for me to fall back on? If you are not able to answer this salient question, then you need to start budgeting as it is not too late to get your financial life together.
Below are 8 strategies that will help you live within your budget:
1. AVOID IMPLUSE BUYING
To curb the habit of spending lavishly especially on things that you did not budget for, you must be strict with budgeting.
Impulse buying has left a lot of people bankrupt because they are always splurging on things not planned for.
To avoid impulse buying, always list out the keys things you will be spending your funds on and stick to it. Impulse buying is an enemy that forces people spend money that they do not have.
2. SPEND MORE ON ASSETS
Some people tend to make the mistake of acquiring that they will not be needing sooner or things that will not earn them money in the future. Such things are called liabilities. And you are better off spending more on things that could appreciate as time goes.
This will not only help your multiply your income but also help you to have something to fall back on if an unprecedent event occurs.
Nobody says you should look like a tramp because you are budgeting. Rather you should try to reduce the amount you spend on irrelevant things while increasing your budget for things that will appreciate in years to come.
3. WATCH YOUR ENTERTAINMENT SPENDING
We all know that after a long month, coupled with all the stress, it is not entirely out of place to pamper yourself. But you should do this wisely if you must live within your budget.
When setting a budget, it is advisable to create a space to give yourself a treat. This way, you already know how much you are spending on yourself every month.
It is important to try your possible best not to overshoot your budget as this will affect you in the long run.
Going out with friends is advisable but should be done wisely so it would not affect your financial goals.
4. TRY TO BARGAIN BEFORE PURCHASING
One of the spending habits that will help you live within your budget is not accepting just any price given to you when you want to purchase something.
Always try to bargain. By so doing, you are cutting down on expenses and saving what is left.
Do not be scared to bargain as it is your money and you know how hard you worked to earn it.
5. CALCULATE YOUR INCOME AND EXPENSES
For you to live within your budget, you need to know how much is coming in and going out. Most people budget monthly because most bills follow a monthly schedule.
Start by making a list of your monthly income sources, including your salary (after taxes) and other stream of income. Add everything up, the total is your monthly income.
After that make, a list of what you will be spending your income on and how much you are putting aside for savings. Making this list will help you not to overshoot your budget
6. ANALYSE YOUR SPENDING AND BALANCE YOUR BUDGETING SHEET
The plan is to ensure that your expenses does not exceed your income. So, to make sure this is not happening, endeavour to analyse your spending and balance your budget monthly.
If you find that more money is going out than is coming in, then you need to make adjustment.
Once an expense is done, always go back to your budgeting sheet to balance it. This will enable you stay on track.
7. REVISIT YOUR ORIGINAL BUDGET
It is always advisable to revisit your budget. This will enable you to have a chance tomonitor your income and expenses for a month or two, so you can know the areas that needs adjustment.
Maybe your initial monthly income estimates were off, or perhaps you didn’t account for expenses like car repairs. Make adjustments, but always balance inflows with outflows.
If get extra income, for instance from a job promotion, it is advisable to increase your spending as well as your savings goals. Saving should be part of the plan.
Financial planners recommend that your savings cover six months of income, enough to compensate for a job loss or other emergency.
It is also important to open a savings account and fund it gradually until you reach your goal,
Creating a budget is a great step towards a more financially sound future for you and your family. Committing to your budget will get you there. Remain realistic, evaluate it often and don’t be afraid to adjust. Budgeting is all about balance.