Budgeting lies at the foundation of every financial plan. Creating a budget for managing your finances can help you priorities and understand your expenses, review your spending patterns, and uncover ways for more savings; in order to pay off any debts you may have, or for that special treat! Did you know that experts recommend allocating 20% of your paycheck towards savings? Read on for more tips on how to manage your finances.
Important tips
1. Budget
The first step to taking control of your finances is doing a budget. It can help you stay on top of your bills and save money each year.
2. Calculate your income & expenditure
Calculate your income, and expenditure. Classify your expenses in terms of essential (e.g. utility bills, grocery shopping or transportation), or optional (e.g. leisure activities). Budget for your fixed expenses, first.
3. Review your bank statement
Your bank statement offers you insight into your financial habits. Review your bank statement, and card statement every month; without fail. This will help you verify if you are sticking to your budget, or detect any unusual activity.
4. Limit your spending
Try to include a saving item in your expenditure every month, by committing a part of your paycheck to it. Spread the good word, and habit, with your family and friends!
5. Start saving
There is no bad time to start saving. Even Rs 100 per month counts. Start now!