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How do you budget? Is it necessary to have a budget?
How to budget your money?
- Determine why you need a budget: Preparing a budget is always a good decision, but it is important to define goals before starting the process.
- Try a simple budgeting plan: It is advisable that you try a plan which is simple and can be maintained by you for a long time.
- For absolute essentials, keep 50% of your income: Try to keep aside half of your income for absolute necessities in your life.
- For lifestyle expenses keep 30% of your income: Wants are those unnecessary expenses that enhance your lifestyle.
- 20% of your income should be set aside for savings: Try to keep aside 20% of your hard-earned money for savings plans, retirement corpus, debt payments and emergency funds.
Making your personalised budget is very important to build proper spending habits, keeping money aside for the long term and making sure that money is there when you actually need it.
