How to plan your budget smartly?
Posted on: 20/Mar/2017 11:47:42 AM
Though the importance of budgeting is continuously stressed and people realize its need to much extent, it is always difficult to implement it practically. The main reason is not being able to shrink our expenses within planned budget. People tend to give up budgeting just because they are unable to stick on to their budget. And you need not complicate it too much.
Budgeting is in fact very simple.
How do we generally plan our family budget?
We start with listing out all our sources of income and list out the expenses as well. Once you allot specific amount towards each and every category of expense, you should have a close look on your expenses so that it doesnt exceed limit. Importantly, you should consider each and every category of budget.
You may end up in a chaos if you categorize your expenses too extensively. You should rather divide your categories into three.
- Standard expenses
- Expenses that are subject to change
- Avoidable expenses
Standard expenses: monthly house rent, EMI, insurance, etc are some of the expenses that do not change. Your monthly savings will also fall under this category.
Expenses that are subject to change: provision bill, mobile recharge, etc will fall under this category.
Avoidable expenses: luxury expenses, dining, outing, etc will fall under this category.
Once you segregate your expenses into these categories, you will get clarity on your budget. The first two categories are mandatory and the third one depends on your smart dealing with money.
