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Let's Learn the Technique of Creating Your Own Budget

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Written by   10
2 months ago

Experts say that whatever the income, it is necessary to spend wisely. However, at this time of rising commodities, it is a little difficult to share the expenses in line with the income. This is exactly the reason why the budget has to be calculated in advance so that the chances of failure are reduced. Experts at The Balance, a personal financial advice website, tell you how to manage your budget properly in six steps.

Step 1: Calculate previous expenses

Suppose you have never budgeted before. Only income has come and spent, you have saved what is left. Well, then sit down with a notebook now. Let everything go according to the previous rules, just keep writing what is being spent every day. At the end of the month, this book will be the initial road map of the budget.

Step 2: Calculate income

Suppose you work, the office pays you 40,00$ a month. Now you can bring home the whole 4 thousand dollars, or something is already deducted? Provident Fund, Income Tax Office, Canteen, the money that is in hand after paying the debts, the original income should be calculated. In the case of traders, personal income tax is calculated at the end of the year, so once a year you have to withdraw some money every month without the pressure.

Step 3: Put the savings in the spending sector

The first step was to calculate the cost. Then save all the money that is left over and save it. If you keep the savings in this way, a certain amount will be accumulated, which can be spent on big work in the future.

Step 4: Calculate other expenses

Some expenses are daily, some weekly, some monthly. Separate these costs. There are some costs that are fixed, such as: rent. There are some costs that can be reduced or increased, such as electricity bills. Take them apart.

Step 5: Budget the costs

Now start calculating from one day budget. Such as the cost of your food in one day, the cost of travel, etc. Some days the cost of food may be more or less. If it rains or there is a problem with the movement of vehicles, the cost of travel may increase. So you have to keep some emergency money in this sector. Once the cost is gone, it can be saved. Alternatively, after calculating fixed expenses such as house rent, children's tuition costs, divide what you have left over into variable expenses. While taking this step, you should keep in mind that you would not have spent in some places in the previous month, but the cost has gone up. That money will also be saved.

Step 6: To have a good budget

The last step is budget implementation. When it comes to this step, keep in mind that the purpose of the budget is not to reduce spending, but to reduce waste. We have to try our best to eat nutritious food with what is allocated in the budget, someone's illness has to be treated and long term plan has to be made. None the less important. If family members are bad at saving money, then it is a failure of budget.

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Written by   10
2 months ago
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