Don’t avoid ‘B’ word. Here’s why budgeting is important

  • People often avoid budgeting as it essentially means cutting down on expenses and limiting spending. But, you can’t avoid it for the longest time in order to get onto the right financial path. Making small adjustments in your monthly budget can leave you with extra cash, which can be used to invest and in untoward circumstances. These adjustments and accommodations can be easily made when in 20s as liabilities are less and expenses are limited. Here’s how you can maintain a monthly budget and save money for investing

  • 1. Save first: As soon as your salary comes, save a portion of it. Do not use this amount for paying bills and unnecessary expenses. Keep this purely for investing and emergencies.

  • 2. Make a list: Draw a list of essential items and re-do it. This will help you in cutting down on unnecessary items and keep you focussed.

  • 3. Realistic budget: Once you have a list, make a realistic budget. Include entertainment, eating out, travel, shopping, etc. in this budget.

  • 4. Discounts and offers: The market is flooded with discounts and you should make the most of it. Do not overdo it and stay within your budget.

  • 5. Credit trap: Avoid credit trap at any cost. Credit cards are useful but you don’t have to carry them everywhere. They lure a shopper as you don’t have to pay up immediately but when the bill comes, it leaves you exasperated.

  • 6. Debit vs credit cards: You can use debit cards as they will remind you to stay in your budget. Plus, they don’t have any extra costs. Whereas, credits cards are a great option as you get time to pay but a tricky one. Check taxes and extra fees on credit cards. To make the most of credit cards, use the one that fetches you discounts on eating out and travelling.

  • 7. Stick to your budget: It is important to make a budget as the extra amount can be used in other expenses. Over stepping it will move you farther from your financial goals. The 20s are an ideal period as you can get the discipline that will help you in long term.