Now that you have started tracking your expenses daily you know how much you spend and on what do you spend.
Also, you have compiled a list of your income sources and fixed expenses.
Day 3 – It’s time to prepare a budget.
Budget is allocating some part of the money for some specific purpose. A budget for entertainment, a budget for grocery, etc.
Suppose you make 10,000 per month you allocate the money for particular expenses and for savings as well. From 10K you keep 2K for bills, 6K on fixed expenses, 1K for entertainment and save 1K you save every month.
Budgeting is a simple task but is one important task as it gives you a clear picture of how much should be spent and saved.
Budgeting works in tandem with goal planning. We will look into goal planning in the next few days.
Few ways you can stick to your budget –
- Track proper inflow of money
- Track proper outflow of money
- Save money wherever its possible
- Write down your personal finance goals.
- Be honest and realistic.
- Keep tracking and consider maximum factors that can ruin your budget, beware of them.
So for now, prepare a rough budget for this month and try to stick to it. This won’t take much of your time.
Share your thoughts in the comments section below.