While you’re creating a monthly budget the first step is to pay close attention to your income and expenses. Savings and having an emergency fund for future use forms the second step. Finally, once the budget looks good on paper it is necessary to convert that to fruitful results.
Start working every month until you’re meeting your budgeting goals and saving goals. The coronavirus pandemic is a great platform to rethink your financial strategies and develop good practices with respect to your expenses.
Here are a few signs your budget isn’t giving the desired results and tips on how to fix it.
1. You’re Pessimistic Or Broke
The signs of depression related to money matters seem obvious and in spite of regular income, it can bring in the negativity around your budgeting. Predicting this shortcoming isn’t tough because either your budget is not realistic or you’re failing to stick to it.
The pandemic has tightened the strings and the increasing uncertainty on financial well-being can be too much on your shoulders. Reset your spending habits to stretch the money further.
Never late than never!
2. Your Standard Of Living Is Uneven
Things have changed since the COVID-19 pandemic, going out for dinners or ordering food and after exhausting your money you must have been eating noodles at the end of the month. For beginners, probably the lack of funds was because you are not spreading out the entire month you initially budgeted for groceries or meals. Secondly, you are underestimating food costs. Start allocating more budgets towards food and or other expenses like utility bills that suck out funds early in the month and become a headache later. Try out something like payment apps for bills as they are a real breather at tough times. Cook meals more often at home, it is healthy and safe.
3. One Huge Paycheck Goes Towards One Big Expense
When you come across two big payments in a month, naturally things can get out of hands and push you with more debts. Allotting a paycheck for rent or mortgage payment is a common thing to do. However, the unexpected addition of expenses that need to be paid through the allotted paycheck can be a dead-end to your savings journey.
Try to set aside money for the rent which allows you to maintain some extra money to overcome out-of-the-blue surprises at the month-end.
4. You Missed Out On Emergency Savings
The changing lifestyles can spoil your plans of having an emergency fund and hence you are asking for trouble. An emergency can neither be avoided nor predicted you just have to attend to it and if you complain, the fingers will be pointed towards only you. Even a small expense can magnify into a huge one and that will eventually turn into a long-time debt.
Ideally, you should start a back-up fund to pay for at least five to 6 months of expenses. If you give up you lose but if you make up your mind then you need not worry next time something hits you very hard financially.
Once you achieve your goal for an X amount stop relaxing, adjust your savings, and aim for higher amounts.
5. Incurring Additional Credit Card Debts Every Month
Credit cards are like leeches; they suck out your money and you won’t even know. The more you stay away from credit cards the better for your own good. As mentioned earlier, payment apps can help ease the pressure on you and they are more or less ready cash that you have for use.
Check you’re spending and start saving, that is the only way to move ahead!
By Karthick V.