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  • Life - Style
  • Updated: March 12, 2020

Budgeting Fundamentals: Five Ways To Stay Financially Healthy

Budgeting  Fundamentals: Five Ways To Stay Financially Healt

 

So, obviously, it is 2020! No frenzied shouts? Unrestrained excitement? Oh, it's common knowledge already, my bad. What about, it's the first Tuesday in 2020!! Oh, yeah? I hear the muffled screams now. With a new year underway, people are definitely setting ambitious goals for themselves. Buy a new car. Get a higher-paying job. Improve my spirituality. Improve my health and overall wellness. More exercise. Make more friends. Join a reading club. Build stronger networks.

Well, while all these are commendable goals and targets - some hinged on personal development, and others, on social adaptability - don't you think one might have been left out? This seemingly odd one, while of immense importance, is more often than not relegated to the periphery and it is the goal of improving your financial health.

Do you know that your financial state can have huge implications on your physical and mental health? Financial stress has numerous physical consequences. Some people go to bed thinking of the debt they owe and other financial burdens. Others find themselves easily distracted and requiring some form of mental aid for sustained concentration.

In other cases, rising prices of commodities make surviving on a modest budget quite difficult, if not impossible. While the prospects of implementing a viable future savings plan might sound better on paper. A lot of people struggle to maintain a generally accommodating expense plan, such that they find themselves spending way over their monthly income, and in some cases, running into debts. This doesn't bode well if you have got one or more of the goals outlined at the onset of this piece to complete this year.

If you feel, you fall among the categories listed above, here are five ways to significantly decrease your money worries, get financially fit and improve your financial habits in 2020.

Budget Budget Budget
A lot of people do not budget because they feel it is one long, boring and extremely linear process. Quite rightly, the process of listing out expenses, adding up numbers and making sure everything lines up does not in any way sound alluring. But if this one activity is all it would take to redefine your crippling finances and set you off on the right track to financial astuteness, why think twice?

Having a budget means you already have your expenses for the new period - could be a week, fortnight or month, depending on the regularity of your income - clearly delineated, such that you know where each and every penny is going. A good budget is a basis to build a solid financial foundation. So, instead of thinking of the rigorous process creating one might require, think of the unrivalled value it will bring.

Operating on a budget - which in some cases might be a shoestring - could be really limiting and restrictive and might require necessary drastic actions. But with the right mindset and zeal, you will scale through. However, while creating a budget is one thing, sticking to the schedule is another, which brings us to the next tip.

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Use Your Budget
You see, after taking the time to create a wonderful outline that covers expenditures for a particular period, most people would go on to disregard this outline, tucking it into the far end of their dusty bookshelves. This action alone spells disaster. After creating your budget, make conscious efforts to follow through.

You must regularly consult your budget to ensure you're on the right track. Tick relevant entries that have been settled and always update your budget at the appropriate time. This will help you arrive at the correct figure of how much money you have left to spend.

Just so you know, a salient part of your budget is the net income. The net income is the amount of money you have left after subtracting your expenses from your income. You must show how you intend spending these extras while taking into cognizance the eventualities of unforeseen expenses. In the end, only those who have actively participated in the constant update and use of their drawn budgets will be able to apply tip four, which by the way is very crucial to having wholly healthy financials.

Minimize Your Expenses
The best finance experts will tell you that the most critical step towards attaining healthy finance is living within your budget. A naturally apt practice towards achieving this is curbing your expenses. While on a budget, you might want to spend more by habit. You might feel you have earned the liberty to go on a spending spree since your primary expenses have been taken care of.

However, a wise action would be to hold back and recognize the situation on the ground. There is no need to invest in a car, a PlayStation, trendy wig, fashion apparel in vogue, the latest phones or other unnecessary gadgets when there isn’t a clear need. A secure financial future is worth more than short-term pleasures. Buy things only when they satisfy a need. You should know there exists a difference between a need and want. Striking the requisite balance between these two will in no little way impact on the efficacy of your budgeting plans.

Prioritize A Saving Plan
Just so you're clear, budgeting is not the same as saving. A budget is a lucid depiction of one's intended expenditure, usually coupled with expected revenue while to save is to keep something aside for the future.

After perfecting the process of subtracting your expenses from your income, some amount of money will be left. You have absolute carte blanche to decide how you want to spend this money left, but if you want a secured future, the best thing to do is save.

There are different ways you could save money. You could open a fixed deposit bank where you remit your extra money into. A fixed deposit account restricts access to your money for a stipulated period of time. Modern advancements have also created smooth and easy avenues for people to save money through virtual facilities. Organizations like Piggyvest, Carbon, Kolopay amongst others allow you to not alone save extra money, but also accrue interest while doing so.

Other people have realized subscribing to investment packages that deliver enormous goodwill, in the long run, are actually quite beneficial. The ultimate aim is to have a contingency plan for the rainy days, and if the rains do not come, for a secured future. Whichever means you intend using, ensure you undergo proper research before delving in.

Make Sure You Are Paying The Best Prices
A critical step towards pushing the bar towards the green rather than red end of your financial balance is purchasing goods at the lowest price obtainable. This will require you comparing prices of several vendors till you arrive at a cheap, efficient and more suitable option.

Avoid passing off as a tryhard or being overeager to impress people; competing with others on more weightier budgets should also be crossed off your bucket list. Look out for discounts, coupons, promos and alternatives that get you ownership of an item at a lower price than usual. This goes a long way in increasing your saving power.

Should you have a desire to make a big purchase, save up for it. Truth is, humans are dynamic and as such are wont to a kaleidoscope of needs. What might initially seem appealing might after a couple of weeks or months appear irrelevant. Do not fall a victim of the loophole that is incurring debt, perhaps through obtaining a loan, unless you have a clear strategy towards employing the said money to yield greater proceeds.

It is vital you understand that the process of attaining a financially prosperous level is achieved over time and, of course, is not limited to the points listed above. However, these tips offer a tremendous guide to shape and put you on the right track towards financial fulfilment. They might seem daunting at first glance or even beyond navigation. However, with a tenacious mindset and proper conditioning, they should not be difficult to perfect. Changing the preexisting patterns of one's lifestyle could be pretty tricky, but the rewards that lay at the tail-end of that voyage - considerably healthy finance - should be enough motivation.

 

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