I was browsing through my photo files when I chanced upon a photograph taken in 2006 during the budget planning of the group of companies I worked with. I played an important role because I was the accountant / financial analyst. I remember we even had a 2-year turnaround plan for one of the companies that was incurring loss year after year. The problem was the company did not have a budget plan. It was too late though, the company eventually shut down.
On a personal level, it only becomes difficult to live on a budget if you don't have discipline. I was very much guilty in the previous years. It was only last year that I got to be conscious of my spending habits. I'm sharing with you easy budgeting tips to get you started.
Easy budgeting tips
Make a list of your annual, monthly and weekly expenses
Your weekly expenses list will include transportation, grocery, snacks, and whatever purchases you make on a weekly basis. House rent, utility bills, loan payments, medicines will be in your monthly expenses while vacation, gifts, taxes are annual list entry.
Know how much you are earning
It is easier for salary earners to know how much is the take home pay. It is more stressful for freelancers like me because we don't have a guaranteed amount of pay every month. If you are spending more than you are earning, it's now time to review your spending habits.
Non-negotiable expenses
Non-negotiable expenses are those you have to incur regularly. You can not let go of these because you need them to live a normal life. You need to eat, you need electricity, and you need transportation. But you don't need to spend too much.
Negotiable expenses
Negotiable expenses are those you can live without or not a priority. Are you spending too much buying milk tea? Do you really have to eat out every day or every week? Are you subscribing to more than one video streaming providers?
Set a limit
You don't have to totally deprive yourself of the things that make you happy or make your life comfortable. All you have to do is set a limit on the amount you spend on them. Also, make sure that you set a realistic limit. You can't cut your meal to once a day but you can opt of a least expensive meal.
Stick to your budget
This is the hardest part. Sticking to your budget requires discipline. Before buying something, ask yourself if you really need it. Never make an impulse purchase. Also, it helps if you don't bring more money than you'll need for the day.
Don't save to spend
The first goal is to not spend more than you earn. The next goal is to keep the money you save. Don't save to spend. It is okay to spend a little to reward yourself at the end of the year from the money you saved.