How to manage your budget well?
Managing the budget is an essential step for anyone who wants to have control over those financial resources in order to achieve something. Stated like that, it may sound simple enough, but it is far from being.
However, there are some simple, easy-to-follow rules for controlling your budget, managing spending better, and saving money. The prerequisites: rigor and organization. Here are some tips to help you better manage your budget.
Why is it important to manage your budget?
The budget is made up of all the expenses and resources of a household. There are three types of expenses such as fixed charges (rent, taxes), running charges (regular amounts, but variable and can be reduced) and occasional expenses (one-off purchases of goods). Resources for their part include income from work and social income.
Good budget management is therefore essential, insofar as it serves to balance your resources and your expenses and then to avoid repeated debts. This is all the more important when taking out loans. The confidence of the banker will undoubtedly be strengthened.
Whether it is a consumer loan or a mortgage loan, your bank will check whether you are trustworthy and the issue of debt plays a big role in the balance. By simplifying the management of your budget, you will simplify your life at the same time.
Some tips for managing your budget
By managing your budget well, saving will become easier. Here are some tips that might help you achieve this.
One goal at a time
Many people usually set more than one financial goal at the same time. They are trying to pay off their debts while saving money for retirement, money for children's education, money for marriage ... Doing it this way can be a very difficult task, if not impossible. Instead, try to focus all of your efforts on one goal at a time.
If the goal is to reduce your debt, focus on reducing your debt. If you are saving for the purchase of real estate, only pay attention to that.
In this way, your self-confidence will be boosted as will your sense of management. Once your first goal is reached, continue this momentum your motivation by moving on to the next.
Adopt the 50/30/20 method
The 50/30/20 rule is very popular for guiding your personal financial management. This method allows you to budget by dividing your expenses into broad categories.
You will therefore regularly devote a certain percentage of your salary to your savings goals. Thus, your salary is distributed as follows:
50% is used for basic expenses: accommodation, basic bills, food purchases and other necessary expenses;
30% are devoted to certain pleasures: shopping, outings for lunch or dinner, vacations and other non-essential expenses;
20% for savings: financial goals, investments (PEA, life insurance), emergency funds.
You should classify your expenses into these 3 main groups. The main goal is to separate spending on pleasures from saving. As a result, you will save more every day by spending less.
Pay all bills on the same day
When you look at your debits, you'll find that you've been billed for the entire month. The third day of the month was phone bills, and the twelfth day was online subscription, and so on. The problem is, it doesn't predict spending. So pay all bills on the same day.
It is true that some invoices will be a bit complicated to pay up front, but most businesses now accept payment in advance and this should simplify your day-to-day life and save you a lot of time.
Establish a payment schedule
If you can't pay all of your bills on the same day, set a specific schedule. This lets you know exactly when the invoice is due.
If you're using your computer's calendar software, for example, you can add automatic reminders to make sure you don't miss your monthly deadline. Thus, there will therefore be no more late penalties.
Record all expenses
It is very important to keep track of all your expenses so that you know where your money is going. You can write them down in a small notebook that you take with you on your outings. You can also list them on your smartphone.
It is important to record the expense immediately after a purchase. In fact, it can help you think carefully before making a spontaneous or impulse purchase.
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