Budgeting to bring finances under control

Don your ‘budgeting’ hat and Get a step closer to financial independence

11:35 10 July 2014

With every organization or individual, it is very necessary to know how to bring your spending under control. A budget is very effective when it comes to this kind of job. This is the only way to get a grip on your finances ensuring that your money is being used in the best way possible. There are very many benefits of using a budget and this is what leads us to how to make one, so you too can enjoy these merits.

 

Practically creating a budget takes three steps. 

 

The first is to identify your current spending rate, and then you evaluate your current goals versus your spending and also look into your long term financial requirements. You then start tracking your spending ensuring that it is in line with your goals and guidelines. You can use software to save you time and grief of all the calculations that you need to account for. However, you should not drive yourself nuts when you realise the current spending bracket you are in. Everybody is not the same and thus all you need to do is start somewhere. 

 

After you figure out your expenditure make sure you start driving yourself to attaining more savings and better spending plans. One of these helpful plans is to save 10% of your earning and ensure you do not spend more than you can afford. 

 

Similarly, never count on windfall, that is, count for money that is actually in your hands. Do not count on pounds you are not sure you will receive. Some of these that you should not rely on include bonuses, interest not yet attained, tax refunds and so forth.

 

In any chance of salary increase, beware of spending more on luxuries. Promotions may lead to wanting a better lifestyle but actually you should take this as a better opportunity to increase in your savings.