Budgeting is a method on how to spend money wisely. Sometimes budgeting is also called spending plan. It is planning how and where to spend your hard-earned money properly and effectively.
It involves controlling your expenses and buying products or things that you really need. It is a proven way to safeguard your finances against impulse buying, or buying products out of instant gratification without thinking that the product is not needed for your every day living.
In order to budget your money properly, you can do the following tips:
1. First, you need to plan ahead where to spend your money. Identify first, the things you need placing in the top the highest importance. For example, food, clothes, money to save, paying bills and others. Put ‘wants’ on the last priority such as new phone or mp3.
2. Track and monitor where you spend your money. In this way, you will have an idea where your money goes. You will have a data afterwards which you can use to control spending. It is advisable to use spreadsheet to monitor your spending.
3. When buying food, clothes and groceries, always compare the price of products you want to buy not compromising the quality. You can also buy products in bulk if you have enough money and the product has long expiration date such as shampoo, soap and toothpaste.
4. Limit eating out in restaurants or fast foods. Sometimes it is better to eat in your home, you are sure that the food is fresh and it is prepared clean and the way you like.
5. If possible, buy clothes and other products when it is on sale, so that you can avail discounts but be sure the product is still on its highest quality and good performance.
So in budgeting, it is good to remember that you do it not to deprive yourself but you do it so that your money will not be wasted on things you do not really need. In this way, you will be able to save money gradually, budgeting and saving goes together.
By Gil Tenorio
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