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How to make a budget that saves your money daily?

How to make a budget that saves your money daily? Leave a comment

David Choudhury is a Freelance Writer, a Professional Blogger and a Business enthusiast. He Helps people make a happy living through his writing.

How to make a Budget that save your money daily?

Most of the people realize the importance of budget when there is an emergency. Whenever you come across an unexpected incident, and all your saving is invested in the medical expenses, you realize the true potential of a budget. You may have health insurance but initial payments have to be paid through your pocket. Budgeting not only helps you to control your expenses and managing money flow, but it also helps to mitigate unwanted expenses compensated with other expenses.

For example, you come across an unavoidable eye infection, you have to spend a minimum of $50 in spite of having health insurance. You will spend this with your emergency fund, right? But how much time will it take to refill your emergency fund again, Guess! You have to make a budget again.
If you have a complete budget you will know how much money you are spending on different items such a Shopping, Grocery, Restaurant, Movie. Let’s say you spend $100 a month in Grocery, $120 a month on a Restaurant bill and $150 for shopping, if you know your complete budget and expenses then you could take out some money from it and put it in the medical bill. You can reduce restaurant expense to $ 100, shopping expenses to $130, Grocery expenses to $90 for the following month so that you don’t have to disturb emergency fund if you have any or maintain a good month without possessing stress of borrowing money from someone.

Here is how to make a Budget that saves your money daily:

Find out your net income

Calculate your actual income which means cutting all your taxes, PPF, 401(k) and other Employee Funds. This is your money in hand which is going to cover all your expenses and savings.
Add side income to your net salary so as to have a complete budget with all your money.

Calculate Your expenditure

The expense is of 2 types. Fixed Expenses and variable expenses. Fixed expenses include Debt, Credit card bill, EMI, Electricity bill. Variable expense includes grocery, shopping, Restaurant bill, movie, travel etc. Collect all your ATM receipt, grocery bill, credit card bill. Note down total expenses separating fixed and variable expenses in a separate column.

Set your SMART goals

(Specific Measurable Attainable Relevant Timely)
Prioritize your goals on short term and long term basis. The short term includes Time period of 1 year. Long term goal can be range from 2 years to 10 years. Short term goal may be buying a laptop in the next 10 months while the long term may be buying a home in 6 years. Calculate the average amount of money you need to accomplish these goals and prioritize these goals based on need and want. The most important goals which are required anyway to accomplish should be prioritized before “wants” goal. Needs may be having a laptop to do your official works which is far more important than a “want” goal such a buying an app Subscription.

Devise a feasible Plan

Following a budget plan, it seems to be easy but it’s not. Most people Consider following a budget plan leads to a hell of a stress. So it’s not worth to make a plan if you can’t follow it and if it leads to stress instead of making peace. You will be stress to calculate every cup of coffee you drink in the whole month, so instead of a tight plan wouldn’t it be great if you can follow a plan to spend freely after separating out fixed expenses?

Here is the plan to keep it up with goals as well as with reduced stress:

Calculate how much money you need to accumulate for short term and long term goals. Find out saving scheme and separate out monthly instalment to these schemes. Calculate your fixed expenses including your debt, EMI etc and pay these out along with saving scheme deposits in the first place after getting your net income in hand. The remaining money should be used for emergency funds as well as variable expenses. Put out a short amount of money for emergency fund according to your convenience and spend the remaining money as you require without collecting bills.

If you still Stuck with the spending habits of remaining money for variable expenses:

Here is the plan for managing variable expenses:
Calculate your Remaining money and divide it by 30 resulting is your daily limit of spending. Now calculate the total variable expenses and divide it by 30 resulting in the daily amount of expenses you need. You can only spend to your daily spending limit. If it’s more than require expanse put the extra money of the day to your saving account. If it’s less than daily amount of expenses then reduce your daily expenses to the limited spending of the day.

Note: Try to make your daily spending less than require expenses so that remaining money can be added to a saving account to accelerate your goals progress

Align your Habits with the plan (If necessary)

If you can’t follow your plan for a 1st week or the following days
don’t upset. Changes take times. If you find yourself unable to follow it for some certain habits, try to align those habits with the plan. For Example, you may love to donate some money to charity or you may love to pay first in your group’s party, separate out some money from variable expenses and include it inside your devised plan.

Keep Monitor and Reassess your plan

Some changes may be needed to your plan according to your changing lifestyle so embrace it according to your feasibility. For example, you may prefer to buy 1-week grocery altogether, make the remaining changes to daily expanse according to it.
Weekly check or monthly checking of your plan is mandatory to keep up with requiring changes it demands.

Following this plan and spending less than the require daily expenses, you can save a considerable amount of money daily. Don’t forget, if you’re self-discipline any feasible goal becomes an object that is separated by time.

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David Choudhury is a Freelance Writer, a Professional Blogger and a Business enthusiast. He Helps people make a happy living through his writing.

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