Budget your way to financial breakthrough March 1, 2007
Posted by Han in : Finance , trackbackIf you often find yourself short of cash and spending more than you earn, then what you need is to do a budget. If you have problem keeping your spending under control then I would suggest that you do a budget. A budget allows you to keep track on the flow of your money – how much is coming in and where it goes out to. With this information in hand, you will never get into trouble once again.
I would like to suggest to you some of the practical ways to do budgeting:
1) Plan first
You need to plan first. Plan your budget. What you want to buy and how much you want to save. The things you want to buy - is it a necessity or is it nice to have? Can you do without it?
2) Sit down and write on a budget worksheet all the money you spend over a week/month
List down all your expenditures; tithes, home loan installment, car loan installment, monthly utilities bill, telephone charges, tuition fee, school fee, grocery, food and personal expenses. Now take a look at how much you have after you have deducted all these expenses.
3) Buffer for some of the unexpected expenses
After you have deducted all your expenses and with the balance of monies left, you can allocate it for unexpected expenses. Some of these unexpected expenses are unavoidable and to reject these unexpected expenses, one would have to be very firm and discipline.
4) Make all purchases on cash. Do not borrow and do not use credit card
Make sure when making any purchases, use cash. If you don’t have any cash, do not borrow or use credit card. Credit card is used only for convenient purpose where you don’t have to carry a lot of cash. Another good thing about credit card is points collected for using them could be exchanged for discounts or gifts. But when you use a credit card, make sure you set a side the money you are going to pay.
5) If you’re thinking hard of buying something then don’t buy or defer it to some other day
As long as you are considering whether you should buy or not; then don’t buy. Buy only those that is necessity and important.
6) It is wise to check and compare the price elsewhere!
Please check the price elsewhere if you can. Do not be surprised that it may be cheaper! But do not go overboard by overdoing it. Make comparisons among 2 or 3 stores will do.
7) Need not buy the latest
You need not buy the most expensive and the latest model especially for electronic items. The price is extremely expensive when they are first sold in the market. In the next 3 – 6 months, the price will drop tremendously. Buy something that is cheaper and have the basic functions. However, if you have been saving for sometime then go ahead and buy something that is better.
8) Learn to take care of things so that they will last longer
If you really take care of things then it will last longer. In this case, you will not need to get them replaced shortly and thus avoid spending.
9) Write down what you want to buy; watch out for impulsive buying!
Spending money and buying things are pleasurable. Imagine you have the money to buy. Often you will end up buying more than you should buy. This is termed as impulsive buying. You need to cultivate the habit of writing down what you want to buy. Your budget must be in your mind. Your expenses must be in mind. In this case, you will discipline yourself to buy only what is needed.
10) Look for special discounts; they may be cheaper
Make the trouble to look for special discounts. Though it may be a bit troublesome but every penny counts! Just do not go overboard! Just because certain items may cost a little bit cheaper and you have to travel to a very far place to get it then this is not worth it. Just buy from a nearby shop even though it is more expensive. Be wise.
11) Consider what the advertisement tells you
Do not believe in everything the advertisement says; sometimes they are true but many a times it may be more advisable to have the facts verified.
12) Share things with your friends
When you share with others, others will share with you. You can borrow certain things from others, use it and have it returned. Need not buy them because you will probably use it once only!
Conclusion
Learn to budget regardless of whether you are a high or low income earner. You need to know where you money goes to.
Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle. Proverbs 23: 5
The above verse is very interesting; riches (money) will sprout wings and fly off the sky like an eagle. If you do not budget, this is what it is going to happen to your money – it will sprout wings and fly away!
All the Best,
Han
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