Keys to Successful Budgeting
Budget: It is a word derived from a French word name “Bougette” i.e. Purse. In a simple way it is a quantified financial plan for a next coming accounting period. A budget is a method to track the flow of your money that are being spent. It is a procedure, a system which is followed by everyone-from the smallest household to the largest democracy like India. It is the most common term heard during the months of March and April in India .But for many common men like you and me, the main and most important thing is how to create a successful budget?
A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms. It is the way of recording one’s receipts (incomes) and to decide the payments (outflows) accordingly. A properly created budget surely helps you to reduce your debts and make room and save money for savings.
There are so many articles available on different websites today that will provide a rough idea about it. Here in this finance blog post I will give you the important tricks on how to create a better budget. These tips have helped me and other people too whose area of interest lies in finance.
- Record Things:
When you plan a budget, write every aspect of it. Unless you actually sit down with a paper and pen, your budget won’t actually be prepared. When you are devoid of time you at least can roughly note it down by opening a spreadsheet on your computer.
- Keep a trail:
You should know where every rupee of yours is going and from where each one is coming. It is necessary to record things to keep this trail. It is better to write immediately after spending as any delay may lead to forgetting to record which may spoil your entire budget.
- Use Cash:
While using debit/credit card the limit of using your money doesn’t remain. You may end up spending unnecessarily. While dealing with cash you would think twice and use only till the limit of cash in hand. You can also adopt an envelope system in which you fix the amount to be spent for each purpose and would use only that much and stop spending once you are bare.
- Reduce your expense:
Once you’ll start recording, it would be easy to track down the areas where you spend more. Start finding ways to cut down such expenses and thus, start carrying a healthy pocket with you.
- Keep up with your decisions:
The most important task is to keep up with all those steps mentioned above. Don’t feel lazy or lethargic while being a part of the process of budgeting. Avoid delays and keep up with the process of budgeting, it surely helps!
So, all the best and be rich!