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How to not go beyond your monthly budget

By HARSH AGARWAL

1st Sep 2022

2 mins read

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Month end is a time most of us dread. With empty pockets work stress, we keep going with the sole hope of hearing cha-ching notification of the salary getting credited.

To make matters worse, we carry guilt-filled emotional baggage on our backs of not making wise financial decisions throughout the month that led us to the present situation. While this may be the issue with 90% of the earning population, this blog aims to bring you closer to the remaining 10% who remain comfortably placed at month ends. Let us look at a few of the methods to ensure the same!

Analysing

The first step towards sticking to a budget is analysing how far off one is from the intended target. There are many apps that track your online transactions through your transactional messages and give you an idea about how much you earn and how much you spend.

If you mention your budget in the app, they help you track your expenses like groceries, rent, travel etc. and resist yourself from going overboard.

Aiming

Bad habits die hard. And unnecessary spending is a bad habit. Once formed into a habit, these unnecessary spends camouflage themselves into the form of need or necessity. Thus, the only way out is to set realistic and achievable targets that push the boundaries while also ensuring that the target isn't set up for failure.

Planning

Once you've set an aim, it is vital to build a roadmap towards achieving it. On the one hand, the plan must be rigid enough to reach the intended target and flexible eto accommodate ad-hoc spending. It's important to remember that you need to get disciplined with your spending, not get too hard on yourself.

Monitoring

To ensure that the above three processes remain in sync, monitor your weekly, fortnightly, or monthly spending. This would help the you check the unnecessary spending and implement necessary changes (if any).

Although a great way to ensure staying within budget, these steps can take a long time to show effects. You can try implementing any or all of the following for short-term or immediate results.

  • Credit cards - The two-edged sword

While credit cards might appear all good and nice on the surface, it can push you into the vicious cycle of debt where you borrow more than you can repay. However, if used judiciously, you can save considerable time through various offers and cashback available exclusively for credit cards. To sum up, using credit cards is a two-edged sword, and keeping the limit well below what you can pay is best!

  • The 50-30-20

The 50-30-20 rule, to spend 50% of the income for what you need, 30% for what you want, and invest the remaining 20% for investing. It could be a great way to plan your monthly budget. However, increasing the last part bit by bit is a habit you should work towards. Thus, even as one's income increases, one must attempt to maintain the spending levels as they were before.

  • Spend while you save

The most pragmatic way to stay within the budget is to avoid unnecessary spending. But what if we said there's a way to save while you spend. Intrigued? Well then check out Spenny. It takes care of the 20% without you being worried about it.

Conclusion

"You have a family to feed, not a community to impress."

These accurate words by Emma Watson should be your guiding principle for making budgets and deciding when and how much to spend. Remember, it's much better to be rich and frugal than poor and spendthrift.

Stay Safe! Invest Safer!!

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Made with ❤️ in India