Create a household budget if you don’t have one already and maintain it to have a better grip on your finances.
The fastest way to take control of your finances is to realise that financially successful people are the ones who dedicate time and energy towards regularly budgeting, managing and planning out their finances. Most importantly, live within your means. Create a household budget if you don’t have one already and maintain it to have a better grip on your finances.
Step 1: A budget is a worksheet with two columns: one for income and one for expenses. Gather financial documents such as salary, credit card statements, utility bills and other regular payments to ensure you have enough information to begin tracking your money.
Step 2: For one month, keep a detailed log of your spending. Track all your expenses—fuel, house rent, salary to domestic help and utility bill payments, including your spend on daily lunches. You can track this even on your phone.
Step 3: At the end of the month, total your income and your expenses and then subtract your expenses from your income. If your expenses add up to less than your total income, you’re on the right track. If not, examine your spending and come up with a list of what is avoidable.
Step 4: Categorise expenses and set monthly budgets for each. Set goals like spending only 50 per cent of your income or saving at least 30 per cent. Create and maintain the budget with current and future finances in mind.
Step 5: Make a habit of reviewing your budget every month, particularly in the early stages. Evaluate where you are managing it better and which areas need to be worked upon.