I don’t know about you, but when my best friend hears the word budgeting, all she can think of is cutting back on dire necessities. Don’t ask me, because I really don’t know where she conjures up weird ideas of going without meals whenever I mention budgeting to her.
I really hope none of you folks have a dangerous imagination like my dear friend, because I am gonna show you some easy budgeting strategies that definitely does not involve anyone going without 3 full meals a day.
Have a Budget Plan
I know it seems to be the most boring task on the face of Earth, but you really gotta do this folks. Sit down with a paper and pencil and preferably with someone who shares your budget like your spouse or partner.
Make a list of all the things that you need to spend money on for the entire month. Don’t forget to add any expense at this point, even if it seems quite trifle to you.
Categorize Your Expenses
Take a close look and separate the dire necessities from the luxuries and extravagancies. No, don’t be tempted to push ‘shopping for your 18th pair of shoes’ to your dire necessities category. What? I am just saying, that’s all, no ill feelings!
Okay by the time you are finished you should have a pretty good demarcation between the 3 categories of stuff. You will find that the majority of the dire necessities category is taken up by items like paying your rent / home loan EMI, car loan EMI, credit card bill payment, utilities bill payment etc. But that is expected.
Time to Check Your Expenditure Pattern
Now take a look at the other 2 categories. Now is the time when you need to refer to your credit card statements for the past 12 months. Is there a pattern emerging? Do you find yourself spending hundreds of dollars each month on clothes/ accessories or stuff like that?
Majority of the individuals, who analyze their credit card statements in this way, usually agree that they have had a major ‘revelation’. Cut back on the unnecessary expenses and if you cannot do it entirely, consider increasing the time duration between 2 such shopping sprees. Like for example, if you have a habit of buying clothes every month, try reducing such sprees to just 6 per year and from then to just 3 per year. Timing these shopping sprees to coincide with festival discount offers and clearance sales is another great way to easy budgeting.
Start a New Way to Earn Money Each Month
Getting a secondary source of income is a great idea, but that is not what I actually mean here. Have you ever considered paying yourself some money each month? Yeah, people call it by many other names like savings, investments etc, but I prefer calling it this way (it makes you want to do it at all costs)
Fix a certain amount of money that you need to pay yourself and make sure that you include it under the dire necessities category. Do what it takes to squeeze this money out of your monthly budget each month and that includes cutting back on entertainment, dining out less frequently or walking to work.
If you stick to all the easy budgeting strategies this month and then discipline yourself to repeat the success every month of the year after that, you will soon become a pro at budgeting!