Where Did My Money Go? Budgeting Basics You Must Know
Wondering where all your money disappears? Or still cutting corners for your wants and needs? Want to manage your money like a pro? Read on for more…
If you’re having trouble managing your money, you need a budget. But what is budgeting? It’s a way of tracking your income and planning your expenses in advance.
Budgeting lets you systematically organise your spending, so you don’t have to bite your fingernails at the end of every month.
Let’s see how to go about budgeting and the crucial things to keep in mind while planning your finances.
1. Track your income and expenses
You already know your income. But do you track your spending? If your answer is no, you need to be cautious.
First, list down every detail about where you spend your money. Try to do this for a week or, even better, a whole month. You will be amazed to find out where most of your money goes. Moreover, it will give you a better idea about your daily and monthly expenses. There are many apps that let you do this, but you can also leverage the power of good old Google Sheets or Notes.
2. Separate needs from wants
What are the absolute necessities for your existence? Food, rent, electricity bill, your domestic help’s salary! You can’t do without them.
But what about the expensive phone you bought last month? Or the fancy goggles you are planning to buy next month? Can you do without them? Maybe you can postpone such buys for some time. These items are your wants.
3. Draft your budget
Now that you know your indispensable expenses, it’s time to make your budget. Include all your needs. You can allocate funds for a couple of wants too. However, make sure you don’t end up spending more than your income, particularly on things that you could do without immediately.
It’s also a good idea to save some amount every month. You can put it aside in a different savings bank account or invest it in other places.
4. Don’t forget seasonal expenses
Some expenses just come up, like your annual car insurance, your child’s school fees, or a relative’s wedding. You need to plan for these expenses and keep some money aside. Starting a Recurring Deposit (RD) or a Systematic Investment Scheme (SIP) is an excellent idea! That way, you won’t lose your sleep over expenses when these events crop up.
Does financial jargon scare you? Check out the basic personal finance terms you must know.
5. Automate your savings plan
It’s natural for people to forget a few things when they have too many things on their plate. The instalment for your RD, SIP, or any other savings plan can slip your mind. So, the best way to ensure that you put away some money regularly is to automate your savings.
You can schedule automatic transfers from your main account to the savings or investment account.
6. What about healthcare?
The rising healthcare costs can steal your peaceful night’s sleep! Reports show that the rate of medical inflation in India is an alarming 14%.
You already feel the burden on your pocket while buying the monthly medicines for your family. On top of that, there are lab tests and doctor visits to plan for as well.
Moreover, a medical emergency can crop up any time. Digging into your savings isn’t the best thing to do in such situations. But, how to accommodate the healthcare expenses within your budget?
A health plan is the only option. It lets you pay affordable monthly instalments for securing your health and that of your loved ones. This way, you won’t have to worry about paying a huge hospital bill all of a sudden.
The Perfect Health Plan
Ordinary health plans cover only the hospital expenses. But what about doctors’ fees, lab tests, and medicines? Don’t worry. Kenko covers it all.
Guess the best part! Health plans start for as low as Rs 299/month. Isn’t that jaw-dropping? Check out the plans now and take the first step towards a secured future.