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Five Ways to Make the Most of Your Household Budget

Representative photo. (Image: Reuters)

Representative photo. (Image: Reuters)

Setting up an emergency fund is a preventive measure for not derailing your financial plans. Emergency expenses can sometimes strain your finances and cost a lot of money.

Most of us understand the importance of maintaining a budget, but more often than not we drift away from our goal. Proper budgeting is among the first steps towards financial goals. Well, it is important to take into account your financial profile, requirements, habits and lifestyle before planning on a financial budget.

Here are some financial tips to make the most of your budget.

1. To begin with, take all your expenses, small or big, into account. Taking it lightly or doing a guesswork with expenses can take your plans for a toss. Make a tentative list on how much is spent on different items. Here even the smallest of expenses need to be included as they add up over time. For best results begin with tracking your daily expenses throughout the month to get a clear picture.

2. Once you have figured out your expenses, it is time to set some realistic goals. For instance, out of the money left from paying rent, basic necessity, how much can be saved? One cannot save 80 percent of the entire paycheck. In order to set an achievable goal, take into account your income and expenses and then set aside money for your needs and don’t forget to leave some wiggle room for weekend spends.

3. Setting up an emergency fund is a preventive measure for not derailing your financial plans. Emergency expenses can sometimes strain your finances and cost a lot of money. To be prepared for such situations, make it a habit to put a certain amount of money from your salary to build the fund to take care of unexpected medical emergencies.

4. Once the budgeting and saving falls in place, one should have a clear idea about different plans and its costs. To see progress, put money into multiple accounts dedicated to different goals.

5. Different people have different financial aptitude all depending on the income and expenses. Similarly, when it comes to budgeting, there is no one-size-fits-all. One can customize the budget accordingly.

first published:December 27, 2020, 08:53 IST
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