When it comes to money, we all like to spend and save it at the same time. There are enormous things that eat away your money continuously like food, house rent,occasions, memberships etc. After all these expenditures we still question in shock ‘’Where did all my money go?’’ Everyone likes to spend more than they earn and of course it feels tempting. But trust me this royal style will only lead to your misery.
We all have a habit of spending all our money without thinking and then regretting later with empty wallet. So now we have no money and still many debts to pay. It will create an imbalance that will get worse and worse with time unless intelligent measures are taken timely. Your life doesn’t have to be this way. Just reverse the process of spending more than you make and you can easily escape this misery. Another reason that leads to overspending is that we keep on using money without any record when we have it. All of us need to make Budget Plan for our Salary.

WHY BUDGETING IS IMPORTANT?

People mostly ask ‘’Why is it so important to budget my money? Well! It’s the most important thing to do if you want to avoid financial misery. Budgeting is a way to make a plan for spending your money.You will come to know in advance that you will be able to meet all your expenses or not. If budget shows that your expenses are more then just cut it short and adjust it according to your earning so you will be relaxed at end. Making a budget for your salary will provide you following benefits:

• There will be less chances for you to end up in a debt
• You will be able to handle unexpected costs
• You will have a good credit rating
• You can also save easily by making proper plan
• You can easily go for holiday, new car etc gradually
• You will be in a better position to apply for mortrage or loan

ORGANIZE YOUR PURCHASES

Take a notebook and start organizing your expenses from bigger giants like rent etc to smaller outflows even a chewing gum. Make categories like family, house cost, loans, leisure,food etc. In this way you will come to know where all your money is going and how. Also you will be able to cut down your expenses on the required category.
I have done this method back in my colege days and trust me it worked out very well. It has prevented me from many stupid buys and gradually I make it a habit to organize me purchases even in my mind.So get a rough idea about how much money you are earning and what are your final expenses.

PLAN YOUR SHOPPING IN ADVANCE

Never go on shopping without making a list. Plan all the things you want to buy so that you don’t pick any unnecessary item. Don’t try free samples as it might force you to change your mind. Don’t do window shopping as it can tempt you to buy more. Don’t buy anything in an impulsive decision . Also avoid purchasing when your senses are impaired like in a bad mood, listening to music or when hungry.

PAY IN CASH

Whenever you buy something always pay in cash. Don’t use credit cards due to two reasons: As there is no visible outflow of money so you will spend more and second, there will be more money available to you all the time. So pay in cash and full. Never bring more money with you instead you should have only the required amount.Keep your cash in the ATM and withdraw your money once in a week.

GET YOUR FAMILY INVOLVED

Gather the whole family and involve them in your budget plan. Explain all expenses to them and set a limit of how much money any member can spend. Encourage all to cut short the purchases and start it as a mission to spend within your limits. Getting the family involved will increase your motivation level and it will be easier to budget your money.

LIMIT YOUR HOUSEHOLD BILLS

The category from which you can save to maximum level is your household bills. Start limiting the use of electricity, phone calls, useless household items etc. and you can save up to a huge level. Take it as a mission of making your budget right and you will start noticing the difference even in the first month.

REDUCE YOUR EXTRA EXPENSES

Cutting down the larger expenses is the most easiest way to stay within your budget. You can easily do it by following tips:

• If you plan a long vacation each year, don’t go this year and stay at home or go somewhere affordable.
• If you like to have massages a lot then its better for you to skip them as much as possible.
• Try to eat more at home instead of eating at restaurants.
• Switch to common brands to save your money.
• Search about the less expensive mobile phone offers and change the source of energy to minimize the cost.

50/20/30 BUDGET PLAN

It’s a very easy and famous budget plan. In this you don’t need to divide your expenses in many categories instead only 3 divisions are required.This plan is very easy to follow whether you are a student or a family owner. Also you will be able to easily allocate your money. The 3 categories according to this plan are:

Fixed Costs

There are certain expenses that you have to pay no matter what like bills, rent, car payment etc. These are fixed costs because they don’t vary much.It is suggested that on these costs, don’t spend more than 50% of your money. Limit all these expenses up to 50% of your salary.
These constant bills are also a great place to trim your budget. Like if you are having a gym membership then you can cut it to save more money.

Financial Expenses

A normal person has to spend a lot of money on financial expenses like credit card bills, retirement funds etc. These are not so fixed but you have to pay them each month or else they will pile up and become huge monster.So according to this plan, spend 20% of your take-home pay to this category.
If you want to save in this category then you can open a bank’s saving account and also make sure that all payments are clear by automating your system.

Flexible Spending

This category includes all your changeable expenses like food, grocery, shopping, entertainment etc. You are allowed to spend 30% of your money on these purchases. Now this class is upto you mostly . It is both necessary and easy to trim. Limit your leisure activities within your budget. Don’t eat expensive food till you save enough money and do your grocery and shopping wisely.

When you are in a financial downstream its very difficult to control your mind and act wisely. But you can easily reverse the situation by taking wise decisions.