"Do not save what is left after spending,
but spend what is left after saving” - Warren Buffet
No matter how or where we are employed, we are bound to live
on the paycheck we get every month. Even the ones associated with
self-employment tend to rely on the unsure payments and plan their budgets
accordingly.
Sometimes we are forced to spend beyond our budget lines and by
the end of the month let to dig our savings. In the initial days of my
employment with the previous firm, I had no track of my expenses or proper
financial planning and struggled to make ends meet nearing the month end.
I was unemployed for a while after my first job didn't work
out for me and had to depend on my Dad to manage my expenses and it was at this
time I realized my mistakes on financial planning. My Dad was always ready to
help me but I decided that once I stand on my own, I should be planning
properly to live contently with the paycheck and of course to save, even if it
adds less.
By God’s grace and my family’s prayers, I was soon employed
and began to practice a proper plan right from the beginning. Many of us would
postpone our ideas and plans when it comes to finance and savings, thinking
that we are ought to live a happy life rather than counting numbers and
stacking bills.
Financial planning is something that you are supposed to do
right from your childhood, say, from the time you first got your pocket money. Let’s teach our children to follow that right
away so that they will learn the value of things and will eventually learn to
live a content life.
Here are few ways to follow an effective financial planning,
which I practice and keep me going.
·
Draw a
proper budget
To start your financial planning for the following month, one step you
can start immediately is to draw a budget.
Drawing a budget is not as easy as said. You need to include all kinds
of expenses without missing one or else you will be stuck in the middle.
To do
this, you can compare with your previous month expenses and note down
everything in your journal or a book which should be reachable anytime and
anywhere. These are some of the basic expenses you will have to note down.
Ø All
your bills like rent, electricity, water, gas, telephone/mobile, internet bills
and so on.
Ø Household
expenses and groceries
Ø Travel
expenses if you have any
Ø Personal
care – this includes your beauty care and grooming
Ø Health
care- medical bills and so
Ø Entertainment
includes movies and night outs
Ø Short
term and long term investments if you got any
Ø Loan
payments – if any
· Pay off
your bills at the earliest
Once your paycheck for the month
is in your hands, review your budget and pay off your bills and loans to escape
late fee payments. This will reduce your burden and will help you plan your
remaining expenses with the necessary balance in your account.
Set second week
as the deadline for all the bills and loans payment and this will help you plan
accordingly.
·
Weekly
Financial Planner
This is something I wanted to share
with everyone. Wish I had known this so
long ago. I came across this weekly financial planner in About.com and soon
after I started following this. It is so easy and nice to work with.
This is a monthly spending work sheet which keeps
track of your entire weekly expenses. It will take only few minutes of your
time to fill them up every day. You can do it before you go to bed. One thing I
follow is, I write down my daily expenses behind this page, hence making it
easy for me to calculate my weekly expenses. Download and keep in handy. It’s
worth it. I have recommended this to my friends and they are following it too.
·
Cut Off
Unnecessary Expenses
This one is difficult step to follow but you will
eventually adapt to it. Once you are on the budget and is ready to save money,
you should be starting to do some sacrifices.
Keep in mind
that to have better things in hand in future, you have to sacrifice things that
seem good to you now. Before buying anything think twice and always stack your
bills neatly in files. Review your weekly expenses and you will find ways to
cut off unnecessary expenses.
Having said that, when it comes to cutting off
expenses, don’t overdo it. Don’t compromise with health and safety.
·
Savings
per week
This might sound silly but as time goes by it will
make more sense. I was searching for money saving tips before I was in to
proper financial planning and came across this tip to save a sum of money a
week, whether it be too small or whatever.
Thanks to ineedmotivation.com!!
You
can save as much as you want. I save thirty a week in my savings account. Every
week, on Mondays, I will keep aside a thirty before I start reviewing my
expenses. Though it is a small amount it counts to something and make sure that
you don’t touch the account until and unless you are in super need of money.
Trust me, initially it was difficult for me to follow this and I kept
forgetting, so I had to set an alarm for this. Now a day’s even before my alarm
reminds I keep aside the amount.
·
Be Consistent
This is one important step you should be doing.
Follow the routine every month and make sure that you don’t drop your plans
ever. Once I started doing this regularly, I felt happy and content and I still
feel the same. Invest on good things and you will find soon that you are content with
what you have.
Make it a daily habit to note down your expenses and this will
eventually become a ritual in your life. You will soon find where your money
goes and how it can be saved.
So how do you plan your budget or have you got any
ideas on the same???
Kindly share in the comments below….
