Does the word “budget” sound like it comes from a horror story? Because it shouldn’t. Simply put, a budget allows you to have control over your finances and what you spend.
Living on a budget doesn’t mean you have to go back to the days of student life – you just have to make sensible choices and keep track of your spending.
When you take the time out of your busy schedule to create a budget, you’ll know exactly how much money is coming in and how much you’re using. And once set up, the most important test will simply be sticking to that budget plan.
The following tips will help you to stay on top of that budget:
1. The foundation is important
One of the fundamental aspects of your budget will be knowing the amount of money you’re earning versus how much you’re spending. Setting goals for your long-term financial objectives will set the guidelines for what you spend and what you’re able to save.
2. The cents that slip through the cracks
When it comes to your budget, remember that every little bit counts. This is especially true when referring to bank charges. Make sure you have a solid understanding of what your bank is charging you.[tip title=”moneysmart tip”]For example, using the ATM can be an expensive exercise. Draw enough money for the week so you don’t have to go back and forth and rack up heaps of bank charges.[/tip]
3. Luxury masked as necessity
We all know it is nice to treat yourself every now and then. This is especially true after payday when everyone feels like they deserve a little extra special treatment. And you do deserve it – just keep track of spending on luxury items and be aware of when it starts to get out of hand.
Eating out is a big culprit in this case. Everyone knows that eating out at restaurants eats away at your budget more than eating at home does.[tip title=”moneysmart tip”]Get into the habit of cooking up exotic food at home and after a while you will realise that by not going to restaurant you’re not missing out on that much, and you’ll be saving substantial amounts of money too.[/tip]
4. Your bad habits can eat at your budget
Bad habits are normally the most expensive and they can chip away at your budget quite dramatically. Whether it’s beer or cigarettes, cut down and you can put that money towards other expenses.[tip title=”moneysmart tip”]In the long run you’ll be also able to save on those unwanted doctors’ bills. Remember that a healthy person is eligible for lower medical aid and healthcare insurance premiums.[/tip]
5. Make it a part of your home
Share the responsibility in your household. It’s easier to keep to your budget if everybody in the home is aware of their spending and becomes part of the bigger picture.
6. Save for the big stuff
Try putting a percentage of your salary away each month and working it into your budget.
When it comes to big purchases, making a down payment without a loan, you’ll enjoy a lower instalment every month.
7. Life is unpredictable; so be prepare for the unexpected
When budgeting, try to put some money away for when life’s unexpected moments come knocking on the door.
You can’t control life, but you can manage your budget and plan for those unforeseen expenses, like car or household maintenance.
In conclusion, maintaining a budget isn’t difficult, it just takes time to get used to managing your money in this way.
Remember not to be too hard on yourself if you stepped off the path once or twice – it happens. Budgeting will become a part of your routine and in the end you will reap all the financial benefits.