Farah Azida
In difficult times, we all must learn to be thrifty and organise our expenditure and spending. There are ways to be creative in managing our money through improving our budgeting.
Kimberly Palmer shared 10 smart ways to improve budgeting that may be help in your future plan.
The first step is to decide on your priorities. In our life, we must know how to compare between the things that we need and the things that we want. It is different in concept which the things that we need are things that we cannot survive without it, as an example, water and foods. Besides that, it can be said that things that we want is not important because it is just a desire and we can live without it. Lets say between a house and a car, which one is the priority for people to buy first? A house maybe more expensive rather than a car but in terms of an asset and liability, a house is an asset and a car is a liability which means buying the house will make profit. The prices of a house will increase from time to time for some other reasons it is a good investment. It is just some example that I can give.
The second step is harness the power of web tool. On Mint.com, you can upload your account information and get immediate insight into where your money is going. You can then use that information to start saving more money. Other online options include Wesabe.com, Pennyminder and You Need a Budget. This step will help you in saving your money by knowing where you spend your money. Sometimes we are not really conscious and realise the spending that we ourselves make on our own. It might be helping to control your expenses from going overboard.
The third step is to time yourself. Once you decide you need to buy a specific term, a new computer, for example, give yourself a specific time limit to make purchase, such as a half-hour. According to AnnaMaria Turano, œyou dont want to lose precious time shifting through options when your instinctive reaction will probably end up being the best decision. She is the co-author of “Stopwatch Marketing: Take Charge of the Time When Your Customer Decides” to buy. The best decision making is when we make it patiently.
The fourth step is considered the year, not just the month. Budgeting for the year is much better than just monthly estimates. We feel less confident when budgeting in a small amount, so we get to add more of a buffer for unexpected expenses if we estimate it for a year. This was derived from the research by University of Southern Californias Gulden Ulkumen, Cornells Manoj Thomas and New York Universitys Vicki Morwitz. It can be a good financial planning if we do it by a year and not just month.
Everybody likes to go for travel. It is some kind of adventure activities and at the same time we manage to see the world and gain some new experience. Research shows that people get the most pleasure out of spending on leisure activities such as vacations, movie theatre tickets and hobbies, partly because these things usually involve spending time with other people. This is related to the fifth step as people have to set money aside for leisure. Travelling or spending time for leisure activities is somehow important as it is a way to reduce stress from working. It is also a good therapy for managing and balancing people’s emotions.
Continue to the sixth step for improving budgeting which is to consider your high and low points. This step will help you to pin point your weaknesses as it is a quick review of where you go wrong and right over the past few month. It is part of considering the good decisions you made whether it is comparing prices before buying a new television or cooking more homemade meals.
Usually, people like to write down the expenses that they have made every single day. The seventh step is to take the spending diary challenge. Write down every single thing you spend money on for two weeks, along with notes on why and how it made you feel. You might be surprised to discover the real leaks in your budget. Instead of lunches out and cab rides, you might be wasting money on coffee and happy hours. After the two weeks is up, review the list and see what jumps out at you.
Besides that, for the eighth step is to avoid temptation. It is the same when you were dieting, would you stare at chocolate chip cookies all day? So, we need to avoid from allowing catalogues or tempting electronics to come through mails slot every day. Regularly, we must allow ourselves to feast our eyes by walking at the mall. That action always leads to spend our money for shopping. It must be avoided.
Sometimes, our body needs some reward from ourselves which will increase positive vibes. Diets that force people to expunge almost everything tasty from their meals never seem to have much success. That principle applies to money too. Denying ourselves every material pleasure turns money into a sad subject, instead of an empowering one. After all, you work hard for your money, so it should bring you some pleasure.
Lastly, share your budgeting goals with others. Whether you want to stop wasting money on unnecessary shopping trips or pay off your debt, share those goals with friends and perhaps even strangers. This will help in encouraging that you get from others. It is a good thing to apply and be consistent in maintaining the budgeting.
We might think that it is too early to start budgeting and lower your expenses in unnecessary things. Most of the people like to enjoy their income money. These 10 steps will help people to save their money from unnecessary expenses and start to think about the future. It is all about the money and we are the one who control our money, not the money controlling us. This also helps in preparing a bright future for people in managing their life savings. ***