How many of us actually have a budget for monthly expenses? How many of us actually stick to our budget? Most people shy away from budgeting because they may feel overwhelmed by what exactly you are supposed to do, or how you are supposed to do it.
Thankfully budgeting does not have to be difficult or a pain staking item on your to do list. Here are a few pointers on how you can create a simple budget that works for you.
IDENTIFY YOUR INCOME AND EXPENSES
This simply means how much you spend versus how much money you make. To start with, track all your expenses. Spend as you normally would, but for a few weeks, jot down every shilling you spend. For example, how much you pay for groceries, electricity, transport, entertainment etc. From there you can figure out how much money you spend and then you can start filling in your budget!
KNOWING THE DIFFERENCE BETWEEN NECESSITIES AND WANTS
Next step in your budget is asking yourself if spending money on a certain item/product/service is a want or a need? As you budget you will find that some of your money is being used on things you don’t really need.
CREATE YOUR BUDGET & PUT IT INTO ACTION
Your budget is basically your personalized spending plan, it doesn’t mean that there is no “fun stuff” accounted for in your budget e.g. retail shopping and entertainment. It ensures you do not spend more money than you make, and you balance your budget to accommodate everything you need to pay for.
You must have a line item in your budget for saving money. This is important because if there ever comes a time you have a financial emergency or financial opportunity it can help you pay for it. This will help you avoid debt, give you a sense of financial freedom, reduce your financial stress, or even leave a financial legacy for your loved ones.
BUDGETS FOR SEASONAL EXPENSES
Things at times “come up” like school fees, memberships, trips, birthdays, Christmas etc. Set money aside in your budget to pay for these expenses so you can afford them when the time comes. It may even help to have different budgets for different things e.g. a travel fund.
MAKE BUDGETING A HABIT
Stick to your budget as closely as you can. Review it monthly as you create next month’s budget. Give yourself time to get used to your budget and perfect it, this could take a few months. Remember if you fall of the bandwagon once in a while, that’s ok, just remember to restart budgeting so that can be free from financial stress and gain financial freedom.
So why don’t you get started on your budgeting journey today and see how far you will be in a year. Who knows you could be shopping at one of The Junction Mall’s stores for a whole wardrobe makeover, or that new laptop you have always wanted, even a brand-new double door fridge!! Remember to follow us on our social media for more tips on improving yourself and your lifestyle!
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