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NEVER BE BROKE

10 TIPS TO EFFECTIVELY MANAGE YOUR BUDGET.


Managing a budget is always a mind-boggling situation. Most of the time, it’s just a fraction of the population that gets it right. Ever wondered why? Well, here are few tips to help you stick to those tricky budget goals.
 
1. Set a budget with realistic targets – While setting a budget it’s of utmost importance to always classify your needs and wants. While doing so, don’t set the bar too high. Drastic and unrealistic goals are one of the surefire ways your budget will not succeed. Keeping a tab on the number of times you’ve eaten out, is one of the simplest ways in managing excessive expenditure.
 
2. Tracking unplanned expenses – Make a list of events/occasions and place them in the month they are expected to occur so you can plan in advance how you will pay for them. Prioritizing helps. Most often it’s these unplanned expenses that will wreck havoc on your budget, as in the case of an impulsive shopping spree.
 
3. Put your budget in writing – Making a mental note of your budget goals is a recipe doomed for failure. It always helps in putting down to paper your budget plans, as you can review and remind yourself every week and month of your financial standing.
 
4. When the going gets tough, don’t give up! – Everyone overspends once in a while; just make sure it’s not done on a regular basis. Stick to your goals. Your budget is a journey. There will be bumps in the road, so the key is to realizing that everybody makes mistakes. Learn from them.
 
5. Adjust your budget over time – Sometimes it can take months or even years to fine tune a personal budget. Initial budget plans underestimate simple things such as your monthly grocery or utility bills. If this happens, analyze all of the underlying money spent and re-evaluate your budget plans.
 
6. Review your budget every month – Make sure you’ve kept aside the first day of every month to review your income and expenditures. By actively reviewing your finances and comparing it to your budget, you can moderate or curtail your spending habits. It’s over here that you make much needed adjustments to your budget.
 
7. Set specific short-term goals – Short term plans are easier to keep track especially where your budget is concerned. It’s easier to meet off loans/bills when you know where your budget plans are headed. When intermediate and long term goals are converted into short-term tangible goals, you are more likely to succeed.
 
8. Treat yourself – As your financial budget is really a journey, take time to enjoy it on your way. Treat yourself when you reach specific short-term goals. Sticking to your budget should not be a restrictive and unpleasant experience. Just make sure your rewards don’t end up breaking your budget!

 

9. Pay yourself first – The basic goal of every budget is to make sure you save. Investing a portion of your income only goes to ensuring you succeed financially. Move money into a savings or mutual fund account. Many mutual fund companies can setup automatic deductions from your paycheck. Despite your best intentions to save, the hectic, daily demands of life can reduce the amount you are able to save.
 
10. Attitude is everything – Think of a budget and you picture restrictions and pains. When a budget is too strict it becomes more difficult to adhere to. Limit your spending in some areas. This will take some adjustment in your attitude and ways of life.
 

By following these simple tips, you can be guaranteed of your budget plans having a greater chance of succeeding. You will realize that living with a budget is not as tough as you imagined. It’s actually rewarding and fun, provided you play by the rules.
 

REACHING FINANCIAL MATURITY


Most of us go through three stages of financial maturity, says Robert A. Ortalda JR, author of Financial Sanity. The first is the adolescent stage, when we spend tomorrow’s earnings today. That’s when we say: “Why wait, things will work out somehow.” Then there’s the young adult stage, when we spend today’s earnings today and repay overspending from the adolescent stage. That’s when we say: “Still want to enjoy the present; will work out the future later. And finally, and hopefully, we enter the mature adult stage, when we finance tomorrow’s spending today. All of us pass through the adolescent stage. There’s nothing wrong about that. The danger is when we can’t get out of it. We have to at some stage.
 

HOW TO ALWAYS HAVE ENOUGH MONEY (I)


How often have you heard yourself saying, `I wish I had a little more money?’

Are you always waiting for thenext raise? Do you always find yourself short of cash when you want to make abig investment? Are you always left with less than 'enough’?

If you answer in the affirmative to any one of the above questions, here’s howyou can ensure that what you earn is always enough for you.

• Your problem is in figuringout how to live within your means. As your income level goes up, your appetitefor things—right from the basics to the luxuries goes up.

• You tend to increase yourdaily spending levels, according to the increase in your income level. There’snothing wrong with that. Nevertheless, keep a check of where your money isgoing. If you ensure that you buy only what you really need and what you reallywant, you will soon always find 'enough’ money.

• If you imbibe some disciplineinto your spending habits, you will soon have 'more than enough’ to spend.
 

HOW TO ALWAYS HAVE ENOUGH MONEY (II)


In our last tip we spoke about what it means to have `enough’ money always. We said spend only on what you really want and need. Here are a few avenues of spending that you might want to re-consider:

• Eating Out: Nothing wrong with that. The problem is when you add the alcohol bill. Alcohol in restaurants is much more expensive. So why not have the drinks at home/friend’s place before eating out.

• Clothes/Shoes: How many of these do you have in your wardrobe that you’ve not worn more than once? When you are buying something, make sure that it fits you well and that you’re sure you like it.

• Accessories: We all like to indulge in sunglasses, watches, jewellery, perfumes, etc. But do we use all that stuff we’ve bought? By all means indulge, but prudently.

• Public transport v/s self-driven: Do you really need to take your car to work every day? Public transport (trains, the bus) could in fact prove faster. And of course cheaper.
 

HOW TO ALWAYS HAVE ENOUGH MONEY (III)


Overspending might not be wise, but then neither is `over-saving.’ Some of us have the tendency to `over-save’. This is known as `minimalism,’ when we feel that we never have enough money. Over-savers will start saving for that big buy or a rainy day. But they never seem to have enough for that big buy, or that rainy day never comes.

You don’t need to deny yourself of needs that are genuine. And indulgences too are necessary sometimes. Have an optimistic attitude and just follow PRUDENT SPENDING as opposed to CARELESS SPENDING or OVER-SAVING. Oversavers typically are an unhappy lot, who never manage to enjoy life. There’s no point worrying about inflation, and how costs will go up 10 or 20 years down the line. After all, your income levels will also go up by then, right?
 

THE MORE I EARN, THE MORE I SPEND!


How many times have you felt that you were much better off with the smallersalary package you were receiving a few years ago. Quite often, right? Well,it’s no reason to feel bad: a lot of us feel the same. The fact is that as wemake more money, our appetite for the things money can buy also increases. Infact, our appetite inevitably increases at a faster rate than our income isgrowing. The biggest mistake we make in such circumstances is to believe that:“Oh, no problem. After my next raise, I will be able to afford my currentlifestyle.” Don’t get fooled into believing this. We can assure you that by thetime you get your next raise, your aspiration levels too would have increased.So try to “be satisfied” with what you earn. Manage your lifestyle well withinwhat you earn. Don’t depend on your next raise for that.
 

HOW NOT TO GET BROKE DURING CELEBRATIONS


After Diwali or Dassera or any major festival, do you find yourself absolutely broke at the end of the season? Or do you find yourself unable to celebrate it like you wanted to because you just don’t have the cash? Learn from the quaint old `piggy-bank’ that you were given as a child. You would have put some loose change every month, and then open it one fine day, and then be in a position to buy yourself or your folks a gift well beyond your own little means. So what you need now is a slightly different kind of piggy bank --- in this case a separate savings back account in which you put in your spare cash every month. Allocate a minimum sum each month to go into this account. However small this petty cash might be, if you allow it to accrue it can build into a substantial sum by the time you have a celebration. Do not put this spare cash into your regular account, because it will just get lost and absorbed into other expenditures before you know it.
 


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