Budgeting is when someone calculates how much money they spend versus what they bring in, before creating a strategy to ensure that the former doesn't exceed the latter. This is a common practice, not only among those that are careful with money but people that are considerably wealthy as well. Budgeting allows you to save money, but there are a few ways to go about it well. Here are some do's & don'ts offered by Robert Jain.
DO use spreadsheets to make things easier for yourself. According to reputable names such as Bobby Jain, spreadsheets are ideal for keeping track of finances. Not only can they keep your data organized, so that you don't have to sift through multiple pages, but you can pull up said spreadsheets from anywhere. Simply put, you will never be without your information. This is a relatively basic step, but it's one worth taking all the same.
DON'T immediately gravitate toward wants instead of needs. One of the biggest challenges of budgeting is deciding what's a need and what's a want. Office supplies like computers and notebook are often seen as needs. Luxuries like new cars and restaurant trips are regarded as wants. While it probably goes without saying, needs should be prioritized. By doing so, you will be able to save more money in the long term.
DO keep yourself covered for worst-case scenarios. As you budget, you should set money aside to be placed in an emergency account. This can be used for any situation that unexpectedly occurs, like a broken bone or any health complication you may think of. An emergency account can help you cover the costs without you having to pay out of pocket. You may find yourself overspending otherwise, so build your emergency account as soon as possible.
DON'T forget to review your spendings. No matter how confident you might be, as far as budgeting is concerned, you should review your spendings all the same. Make sure that you do this at the beginning of each month so that you have a clear understanding of how much you've spent the month prior. If you feel like there is room for improvement, make note of it so that you can apply such changes in the future.
DO use spreadsheets to make things easier for yourself. According to reputable names such as Bobby Jain, spreadsheets are ideal for keeping track of finances. Not only can they keep your data organized, so that you don't have to sift through multiple pages, but you can pull up said spreadsheets from anywhere. Simply put, you will never be without your information. This is a relatively basic step, but it's one worth taking all the same.
DON'T immediately gravitate toward wants instead of needs. One of the biggest challenges of budgeting is deciding what's a need and what's a want. Office supplies like computers and notebook are often seen as needs. Luxuries like new cars and restaurant trips are regarded as wants. While it probably goes without saying, needs should be prioritized. By doing so, you will be able to save more money in the long term.
DO keep yourself covered for worst-case scenarios. As you budget, you should set money aside to be placed in an emergency account. This can be used for any situation that unexpectedly occurs, like a broken bone or any health complication you may think of. An emergency account can help you cover the costs without you having to pay out of pocket. You may find yourself overspending otherwise, so build your emergency account as soon as possible.
DON'T forget to review your spendings. No matter how confident you might be, as far as budgeting is concerned, you should review your spendings all the same. Make sure that you do this at the beginning of each month so that you have a clear understanding of how much you've spent the month prior. If you feel like there is room for improvement, make note of it so that you can apply such changes in the future.
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