In an economy riddled with inflation and instability, it would seem impossible to plan your budget and further save for the future. However, there are a few steps and changes that you could undertake to ease financial pressure and plan efficiently. We, at MyBankersOnline, feel that such steps are useful in helping you plan your budget and save more for rainy days.
- Try maintaining a log for all expenditures for one month. You can do this by retaining all shopping receipts, utility bills, loan repayments, fuel slips etc. This is the first step in analyzing your monthly expenditure and further helping you to plan your budget for the following months.
- Reduce the fat on your monthly expenditure. When you analyze your expenditure log, you will come across certain expenditures that can be avoided. These usually include excessive fast food bills, unnecessary fuel expenditure, cigarette expenses etc. Plan your budget in a manner that such ‘fatty’ expenditures are reduced in the future.
- Once you have decided upon a satisfactory amount for your monthly expenses, set aside the remainder (hopefully some amount) as your savings. To effectively save, it is important to set aside the amount at the start of the month. Several banks offer standing instruction facilities to their clients; this allows you to transfer a certain amount from your salary account to your savings account on a preset date. To effectively plan your budget, set an instruction to remove your savings amount at the start of the month.
- Divide the monthly expenditure amount into weekly amounts. After setting aside the required amount for monthly utility bills, all variable expenses should be divided into four equal weekly expenses. These would include kitchen expenses, fuel costs, dining out, miscellaneous expenses etc. Next, withdraw the required weekly amount from your bank account for each week. Do not rely on your credit card; instead use cash for such transactions. This allows you to spend within limits. Though useful in many aspects, a credit card allows you to go overboard on your weekly budget easily. Plan your budget by using cash, preset for each week, and limiting expenditure to the allocated amount.
- Reduce your loan repayment debts, especially variable repayments such as credit card bills and cash-line charges. When you plan your budget, allow for repayments higher than the minimum amount to expedite reduction of debt. This will reduce your markup expenditure in the long run.
- Lastly, you should plan your budget in a manner that the entire family is on board. Budgeting and saving techniques are fruitless if the other family members are not aligned with your plan. Share your budget projections with them so that they spend accordingly as well.
The biggest argument would be of exogenous expenses, or unforeseen financial ‘calamities’. For this reason, you are setting aside a certain amount every month. The fixed savings, transferred from your account at the start of every month are for rainy days or expenditures which are not accommodated in your monthly budget.
Plan your budget, save more for the future, and rid yourself of the shock of witnessing your bank balance fall every time you conduct a balance enquiry.