6 Easy Steps to Build a Stress Free Budget

As we hit the half year mark, it is a good time to stop by for a moment and reflect back on your spending habits. So, is your budget still on track? We often track our budgets from the start. However as days pass, we tend to take it lightly and stop tracking it. Spending less than we initially commit should ideally be the most significant financial goal. This helps us to brush off excessive debts, save for emergencies and stash money away for retirement plans.

Tips for Effective and Stress-free Budgeting

For those who are habitual of over-spending, below mentioned points must be kept in mind:

1. Understand the Goal – The basic objective of a budget is to command intelligent spending. This way very less is spent & expenditures are kept under control. This is what matters the most!

2. Segregate Variable and Invariable Monthly Expenses – Put your energy to segregate variable & invariable components of the monthly spends. The fixed amount in your budget usually includes home rentals, maintenance and loan EMIs. Take steps to not default on EMI repayments as this could substantially mess up your budget in the following month. Also, pen own your monthly variables like groceries, regular doctor visits, electricity, phone bills etc. Allocate the amounts to each of these and try to curtail them if they exceed the set-out budget./p>

3. Track your Weekly Expenses – This will reveal how spending even small amounts add up over time. It will also present categories of spending that otherwise go unnoticed. Ideally, we all should track spending of a full month. Though, even a weekly dairy can provide valuable information about your spending patterns.

4. Save For a Rainy Day – Set aside a portion for emergencies, once you know the exact amount of money you need to spend each month. This sum can be extremely useful in times of crisis, so do not compromise on creating an emergency fund as a part of monthly personal budget.

5. Try the 50/20/30 Plan – Under this plan, 50% of the income goes to necessities, 20% to long term savings, and the remaining 30% to lifestyle choices. This can be a good start point if you struggle to decide how much you actually should spend on individual categories.

6. Savings First – Rather than saving at end of the month, divide the savings first and then spend the rest. This kind of strategy takes advantage of behavioral finance.

By diverging money out of your check account and putting into savings first, you are less likely to over-spend during the month. Here, it’s important to note that your budget must be scheduled in a way that you don’t have to opt Personal Loans. In case the need falls upon you, check out Home Credit Instant Personal Loans @ 0% processing fees for tenure between 12-24 months.

Also read: Financial Planning Starts from Your Home