How To Budget Like A Boss in 2021?

In times of pandemic, people have suffered a lot in terms of economic and medical loss; hence it has been a necessity to look after and manage the expenses. With the hit in many developed countries’ economies, it has been necessary for everyone to save some amount for future usage. Yes, it is an essential skill to learn how to budget like a boss.

What is the budget? It is basically an estimation of expenditure and revenue that could be used in the future for a specific period of time. It can be curated for a single individual, a government enterprise, a business, or some who earns and spends money. Crafting a budget is a critical financial skill that helps you plan for your future or can be used in a case of emergency.

To help you with your budget, we have got you covered with specific ways by which you can budget like a boss planner; this will also allow you to have an action plan and a clear image of where your money is flowing to at the end of the month. A Budget always provides freedom, and millennials think that it keeps them away from doing what they want.

Sources of Income

The primary step towards budgeting like a boss is summing up all the sources of income you have; this gives you a figure of how much money is coming in and from where it is coming. Income sources may include wages, pensions, interest from various deposits, alimony, tips, IRA, and child support.

Budgeting Together

This is the part where the married couples have an advantage over the ones who are single. Having a night for planning the budget for a particular month doesn’t sound like a bad idea. This monthly planning will help the couple set some goals for their growth and have an idea of what their future might look like.

After marriage, there is nothing like my money; it is our money, and to support that, there should be a single bank account for expenditure purposes among the couple.

No Two Months Are Same

Especially in India with lots of festivals comes a load of expenses that need to be born, and this can only be possible with strategic spending of your money. Expenses like routine vehicle maintenance, vacations, holidays, anniversaries, birthdays cannot be skipped.

To make sure that all the expenses fall into the accounts, you have to plan according to the requirement of that month. Having no plan can lead to tension and stress, which again is not a sign of good health and may result in unexpected medical tolls.

Prioritising And Red Flagging

All the needs of an individual or a family should be categorized according to the priority it comprehends. The base of the pyramid should have food, shelter, clothing, essential utilities, and transportation once this is filled rest of the blocks can be served. Also putting red flags on unnecessary stuff is as important as fulfilling the basic necessities.

Do Not Be In Debt

If a person is in debt, paying it should be his/her foremost priority. Debt is a slow death that keeps on eating the money until and unless you are in grave danger hence paying it off should be among the essential priorities in the budget. Never let debt rob you, and always try getting rid of the debts as fast as possible.

50/30/20 Savings Rule

The famous 50/30/20 Savings Rule is all you need when you plan your monthly or annual budget. According to this rule, the total income of a family is divided into three parts 50% is for the fundamental needs, 30% is for the wants and urges, and 20% is for saving or paying off the debts. This rule balances the expenses across the various spending areas and fulfills the debts and also makes some savings.

Trimming The Budget

Never be afraid of trimming the budget whenever you are a bit tight on the account. These situations are generally temporary and also help flourish your budgeting skills. Lesser dine outs, getting coffee from home, budget shopping, canceling subscriptions, and vacations can be a way to go in your rough days, you can always make amendments further when the times are favorable.

Cut The Credit Card

This doesn’t mean literally cutting your credit card off, having credit card debt is very stressful and worrisome. Limiting your credit card usage and paying off the monthly credit card bills is appreciated as the credit card bills’ interest is hefty, which is compounded on a daily basis and cannot be managed easily.

If you choose to pay the minimum amount of the credit card bill, it may take years to pay back, or even decades, this is the reason why bankers and people associated with banks do not prefer using credit cards they instead prefer debit cards. Debit cards are always a better option for spending your money.

Scheduling

Making a schedule for all your expense related activities is a step towards the budget like a boss action plan. Making a planner for your grocery shopping, subscription dates, phone and wifi bills, cable subscriptions, etc. keeps track of monthly expenditure and also helps you prepare for what comes next. Not scheduling your expenses can lead to sudden costs which can lead to a lot of stress and potential pitfalls.

Use Cash As Much As Possible

When you use the cash, you spend less than what you spend using your cards or other online payments to make the payments at the grocery or shopping stores. It is a tried and tested way of saving some bucks right away. For instance, you have 1000 bucks reserved for your grocery shopping while you surpass the grocery bill above those 1000 bucks you have no other option left other than prioritizing the items then and there. And limiting your usage through cards may result in saving a lot of money for your future expenses.

Being a Money Savvy Consumer

Do not shy away from being an economical consumer. Always look out for sales, offers, coupons, and festive discounts when it comes to grocery or clothes shopping. Compare different online and offline stores for the best affordable price. Some stores also have their own websites on which they feature holiday offers and other weekly ads. Look out for such offers you can wind up saving a lot at the month-end.

You can’t budget like a boss without being money savvy consumer.

Tracking Your Budget

When you take all the steps to control your expenses and don’t maintain a record, it is of no use then. It is essential to track your progress from time to time. If a couple tracks your progress together, keeping your goals in sight. As there are many ups and downs in the income levels, you have to maintain the balance between everything.

Comparing your early budgets with the current ones can help you cut costs on unnecessary items. You can use many modern-day applications to help you maintain the record of your accounts.

Budget like a boss is a challenging task, but once you get the taste of it, you will enjoy doing it. Saving money for your future is always appreciable, and it gets you prepared for future obstacles or further investments. These steps can help you plan your budget according to your requirements.

Source: Bloomberg.com/how-to-budget-video

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