Budgeting tips for beginners

“Beware of little expenses, a small leak will sink a great ship.”

One of the dilemmas people have during these days of continuous price increase due to inflation is budgeting your hard-earned money.

Few of the most common strategies people use includes, 50–30–20 rule, envelope budgeting, and the INCOME-SAVINGS=EXPENSES.

Depending on the size of your budget, you may choose from different strategies that you think will suit you. The important step is to start as early as now. Remember, your lifestyle should be the one to adjust according to your budget and not the other way around. With the ongoing price hikes, it is essential to save and be ready on any emergencies.

Here are some tips on budgeting your money:

1. DETERMINE YOUR MONTHLY INCOME — First step is to know how much money (income/salary after tax) are coming in every month. That way you can decide what strategy to use or how many percentage you will allot to every expenditures.

2. PRIORITIZE IMPORTANT NEEDS — Make a list of the monthly due dates like electricity, water, internet, groceries, debt payment, etc. Also you may set aside already a portion for savings, emergency fund, insurance and such. So that you won’t miss out all the essential needs of the household.

3. LIST DOWN OTHER EXPENSES — Whatever amount if left, you may spend it for not so urgent and important things such as allowance for eating out, movie dates, car accessories, new set of bedsheets, and other leisure expenses that can wait.

4. PAY OFF YOUR DEBT — Debt may be a major burden, particularly when you have a low earnings. So earlier than you start saving cash, you must awareness on repaying it.

start with the high-hobby debt. it's the only that is drowning your month-to-month finances, so try to pay it off as fast as viable.

it might appear like it’s slowing you down, however it’ll assist your budgeting immensely. after you address it, you may put away the money that went for debt compensation in financial savings.

5. CHECK YOUR ELIGIBILITY FOR FINANCIAL BENEFITS — There are some of government packages that provide help to low-profits households.

The Supplemental vitamins help program (SNAP), also known as food stamps, is an amazing example. It helps low-earnings households purchase food by means of providing them with monthly advantages for groceries. It’s one of the easiest ways to shop money on food.

every other exceptional government program for low-income families is the temporary assistance for Needy families (TANF). TANF affords cash to low-income families with kids. It also helps with activity training, toddler care, and so on.

The Earned profits Tax credit (EITC) is a tax credit score software for working people with low income. it is able to reduce the quantity of taxes you pay or get you money back.

6. MAINTAIN AND MONITOR RECORDS — Lastly, track your books on a monthly basis in order for you to see the progress you make. It will be a guide for a better decision making when you see a bigger picture of your spending. Did you spend a lot for this specific month on groceries? Then why is that?. Had the electricity bill got lower on the 4th quarter of the year? It may be due to the cold season which cuts the aircon usage. These are some things you would know and can decide after tracking your budget regularly. It will build a habit in the long run that would make you more decisive and responsible in handling money.

Remember to pay your future self first through savings and proper money habits. Yet, don’t forget to cut the pie for a little lenience. You are working hard and that you deserve a reward after all.

Be responsible and rewarding on your self.