When we hear the word ‘budget’, we think of it as something best left to the financial experts. However, creating a personal budget doesn’t need to be complicated at all. In fact, one of the first steps while achieving your financial goals is to create a budget. As a part of this new beginning of yours, you will first need to understand ‘Personal #BudgetKaMatlab’.
So, let’s discuss the same in 5 simple steps:
Determine your total income
The first step is to know exactly how much money you’re earning on a monthly basis. This includes your income from every source including salary, dividends, interest, and so forth. However, make sure you calculate your net income and not your gross income. In other words, calculate the money you receive after tax cuts.
Track your spending
Have you ever wondered how your money simply vanished into the thin air? Well, to avoid that from happening, you must track your spending constantly. A great way to do that is by breaking down your monthly expenses into specific categories such as utilities, food, transportation, etc. A nice idea in this context is to install a budgeting app on your smartphone. Make sure that you keep updating all of your expenses – irrespective of how small they are – in it. Doing so will help you track your end-to-end spending. Make the necessary adjustments if needed.
Set your financial goals
It’s vital to set a financial goal before going any further in the process. Whether you’re looking to save for the future like a vacation, children’s education, marriage, and so on, having predefined financial targets will streamline the process. Not only will it feel rewarding, but it will also give you an idea of how much money you need to save each month to achieve them.
Learn to tap additional revenue streams
In your budget, you will need to make room for your rainy days as well. A good way to do it is by tapping additional revenue streams. Don’t think you can work beyond office hours? Well, make your money do it for you. Today, digital platforms have unlocked multiple avenues as an investor for you that are rewarding and highly liquid (which means they can be converted into cash easily).
For instance, investing in the stock market has now become as easy as a touch of a button! All you need to go with a recommendation engine. Some recommendation engines can assess billions of data points before making every stock recommendation. If you want to dive deeper, there are more platforms that will help you learn the ropes. Do you think it’ll be a mess to get yourself caught with multiple platforms simultaneously? You don’t need to. A few full-service digital brokers in India even extend such features all at a single place.
Stick to your budget
It doesn’t matter how much you plan. If you don’t stick to it, your budget on paper will be in va
in. Always keep an eye on your goals – both short-term and long-term ones. If find it difficult, you can start practicing innovative methods such as the envelope system.
Lastly, it all starts with a simple decision to save. Once you make that decision, you’re already halfway there. These points will help you through the other half. So, with Personal #BudgetKaMatlab now at your dispos
al, make sure that you stick to it and enjoy the fruits of your labor later.
By Mr.Roy – DVP- Equity Strategist, Angel Broking Ltd
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