I have come up with this article because I have learned this via research and based on my real-life experiences. Since our life has changed to a new different perspective because of what we called "New Normal", for sure all of us learned dealing with our savings because of the pandemic that help us realized that we need to save our money. Why? Because life gets tough and will change in least, we expected it. Many jobs were lost during those times. Many businesses closed and declared bankruptcy. In my experience, we need to save a lot for emergency purposes. During those lockdowns and hoarding of food, we need to be ready. Lastly, the number one we need to take care of is our health.
Back to the topic, budgeting. What comes to your mind when you heard that word? For me, it is saving money and sorting your salary until the last centavos. It is hard to be serious with budgeting. We need to put it to action until it will become a habit to you. Based on these websites, here are the meanings:
Budgeting is simply balancing your expenses with your income. If they don't balance and you spend more than you make, you will have a problem. Many people don't realize that they spend more than they earn and slowly sink deeper into debt every year.
- My Money Couch Website
A budget is basically a financial plan for a defined period, normally a year that is known to greatly enhance the success of any financial undertaking.
- Investopia
Here are the tips on budgeting your income:
- First, always add up all your income - salary from your employer, side hustles, allowance from someone, income from the businesses. This will be the basic stuff to know and to start with. Know the total amount of your income
- Track your expenses - write everything that you bought, paid for or anything that decreases the mount of your money. There are ways to track your expenses. You can use an app so it will be handy and always in your phone. Some people use google sheet or excel sheet to able to track the expenses extensively. Lastly, as an old soul like me, I prefer using a notebook and jot down all the expenses with my cute notebook for budgeting.
- Set your financial goals - have a financial goal. For example, this month I will save and lessen my debt. One year from now, I will be debt free. 5 year from now, I will have my own home. If you have a good credit with the bank, you will get a loan online with ease or any bank
- 50 / 30 / 20 budgeting plan - 50% of your income for the needs of yourself or your family, 30% for your income for wants and make sure your 20% of your income to savings and debt repayment.
- Avoid unnecessary purchases online or in store - always plan for your wants, if you see something shiny try to sleep first and check if the next day you still crave for the same item. If not, better for you. If you still want it, put it in your budget.
- Be consistent on your budgeting plan. Let it be a habit.
How about you? Do you have your own tips? Share it with us. Comment down below.