Taking Control Of Your Budget
Updated: Apr 3, 2020
The following is an article “Taking Control Of Your Budget” by Marc Primo.
Being financially prepared is everybody’s goal and today’s young professionals are constantly in pursuit of being debt-free to enjoy the finer things while at the prime of their lives. Creating a personal budget and taking control of your expenses is always a good place to start while getting as much advice on money matters as you can take you closer to financial freedom.
Coming up with a personal financial plan calls for proper focus and commitment. You need to determine your sources of income and which portions of it goes to various cost categories. Making an outline of your financial activities will give you the proper leverage to control choices and monitor your expenses.
It’s also important as a consumer to seek proper guidance from related materials or financial experts on how to manage debt. There are many ways to settle borrowed money if you set an effective personal budget.
Whether your goal is to have a good financial plan or overcome debt, here are a few ideas on how you can take control of your money.
Set rules that work. For some, saving up and buying something they want is easier than staying committed to a budget plan. Sometimes, making a purchase can even ruin your financial goals just like that. By establishing certain rules on spending, you can keep yourself motivated and in control of how your money comes in and out. One good rule is to make sure that you have ample “rainy day” money saved up before you make a major purchase. Another is to avoid borrowing money for purchases that are merely ‘wants’ and not actual necessities. The purpose of a loan is to ease your expenses rather than augment your purchasing power for unessential things. Before you take out a loan, make sure that you can rebound financially even if you’re dealing with monthly amortizations.
Make necessary adjustments. Taking a larger portion of your income and putting it into your savings does not make your budget plan foolproof. Live within your means and allocate the proper amount for expenses and savings. An acceptable formula is the “70-20-10 System” wherein 70% goes to living expenses, 20% for savings, and 10% for debt. Of course, you’ll need to make the proper adjustments depending on how big your current debt is. In this case, you can either decrease your spending and allocate the extra amount for payments, or increase your income by acquiring extra jobs to pay off debt faster.
Seek assistance from your apps. Sometimes, people can get overwhelmed when it comes to creating a budget plan because saving up can be a challenge. Seeking help always makes sense if you are having some trouble understanding certain financial concepts. These days, even smartphone apps can help you organize your budget. These applications can help you control your spending habits by tracking your expenses each month. Some apps can also give you great tips on how to curb your purchase impulses and keep you on track with your goals.
Go with cash allowances. Some might think that going cashless will give them more control of their money than carrying cash around. On the contrary, allotting an exact amount of cash allows you to budget your daily spending and leaves no room for unnecessary expenses. Getting yourself used to a financial routine where you only use what you need daily will create discipline and make it easier for you to track your cash trail. Even before the era of cashless transactions, this is how proper budgeting has always been for many. Mastering how cash should work for you on a daily basis will put you on the driver’s seat on your way to financial freedom.