Budgeting and Saving – The Art of Money Management
Life gives us surprises. At any point in time, we can also encounter a situation like this if we do not have the habit of making a budget, planning our expenses and saving money to provide us support at the time of such unexpected expenses.
Money runs our life. All commodities, necessities and luxuries are bought by spending money. It is the most important thing in today’s modern world. The art of budgeting and saving works out a lot for survival. We all need it. But sometimes, we fail to understand the importance of spending money sensibly and saving it so that it can be utilized in our time of urgency.
Mr. Roy is extremely stressed out these days. His son, who is going for his Master’s, was selected for an exchange program and has to leave for Switzerland in 20 days.
He is going to stay there for a year. The college is taking care of the accommodation but his daily expenses are his responsibility only. He has to buy clothes, a laptop and many other things. A lot of money is required.
Mr. Roy bought a new house and a new car few months back and spent the majority of his savings on down payments for the same. Also he decided to decorate that new house. Now, he is clueless as to how he will manage this expense for his son’s travel
He does not want his son to lose this opportunity. So, now he is planning to take out a loan and he will have to bear an additional EMI. Now, he is repenting his decision of buying a car and decorating his new house at the same time. He could have avoided this expense for the moment and saved money for something unplanned like this.
We can save money only when we spend it according to a plan and keep our expenditure under control. The whole process is called budgeting and saving, the skill is “Money Management.” Let us have a look at how we can budget our money so that we can save it to make our future secure.
Tracking earning and expenses
An ideal budgeting and saving clearly reflects how much cash flow we have and how much is required to meet our monthly expenses. In simpler words, it’s Income vs Expenditure. To figure this out one can track the same for a couple of months to frame a budget.
Cutting down on “not so necessary” expenses
There are some expenses that we can not avoid like rent, electricity, groceries, or college. And then there are others which are avoidable like shopping for clothes and accessories, eating out often, buying fancy gadgets. We need to avoid the avoidable expenses to save money.
Use your credit card only when required
We all are getting addicted to the concept of Plastic Money. One of the side effects of this is credit card bills. Try not to use your credit card as much as possible to avoid high interest rates and fees. It will help save a lot of money.
Miscellaneous expenses budget
This technique means keeping a little amount aside every month which is neither your budget nor savings. This helps you deal with expenses which are not necessary but unavoidable at the same time like birthdays, anniversaries, doctor’s bills.
If we try to follow the above-mentioned points we will be able to plan our expenses well, which will help us save money for our future and emergency situations where all of the sudden we need money to accomplish something.
Saving money is a crucial thing and a wise habit. We all should get into the habit of keeping some money aside as our savings.
There are many ways in which we can save money. Putting money in bank accounts, or even making some investment like fixed deposits or insurance policies. These are some of the wisest ways of keeping money safe and getting future benefits. Investing money in property and gold is also a wise decision to make.
Some people invest money in stocks, which is considered risky, so one needs to have good knowledge of how things work here before putting money into this.
It is also advisable for parents to help their kids get into the habit of saving money from a young age. It will be beneficial for them when they grow up and they will also learn to value money as an asset.
Try to put kids into the habit of keeping some money in their piggy banks from their pocket money to make them learn the technique of saving money. This is a good practice to begin now.
Conclusion – Budgeting and Saving
Budgeting and saving looks easy on paper and also sounds simple but, getting into this habit and then following it needs some practice and firmness of mind. It is easy to give in to our temptations to enjoy life, spend whatever we have, and enjoy all the luxuries around us. We should do that, but wisely.
Promise yourself to keep a fixed amount of money from your monthly income for saving and also invest the saved money wisely, once you have the right options available.
It will make your future safe and secure and you will have to face less trouble at the time of your emergencies. Enjoy life but remember to secure the future for you and your loved ones.