We live in a world with constant economic changes, and thus, we need to come up with a strategy to make ourselves financially secure. Budgeting is a tool that people have been using since a long time ago to secure funds for various reasons, especially emergencies.
If you are a professional, you might have certain financial goals that you want to achieve, and a good budgeting plan can help you achieve them. You might want to create a retirement fund or save up for a vacation, house, or car. Whatever your goal is, pick up your budget planner book (or app), and let’s get started.
Define your budgeting goals:
First, it is very important that you have a clear goal in mind about your saving intentions. Depending on what you are saving for, your strategy might change. It is advisable to set short-term and long-term financial goals, as that can help you strategize effectively.
It is also essential that you set realistic goals. Your budget goals should match your aspirations while also considering your income sources. Set achievable goals so that you can manage your expenses accordingly.
Categorise your income and expenses:
Now that you have set your goal, the next step is to categorise. First, you are going to categorise your sources of income. Once that is set, calculate your expenses for the month. This way, you can figure out which source of income will take care of which expenses and you will have peace of mind.
You can use facilities like UPI autopay and turn on notifications so that your fixed expenses are taken care of on their own. You can set aside funds for fixed expenses like mortgage, bills, etc., as well as set some aside for variable expenses like entertainment and outings. This will help you plan out how much you can save and allocate to your dream fund every month or so.
Make an emergency fund:
Now that you have categorised your income and expenses, you have a better idea of how much you can save. Whatever your goals are, house payment, dream car fund, vacation, or sending your kid abroad, it is advisable to set aside a separate fund for emergencies.
It might be a medical emergency or anything sudden. To secure financial stability, always have an emergency fund ready. This fund will give you peace of mind and help you with that extra credit in times of adversity. You can also invest in instruments like mutual funds or stocks for this purpose. Contact your credit card bank to get help with this. You could also use online trading apps and other sources.
Prioritise debt repayment:
If you have any debts that need to be repaid, make sure that you prioritise them. Good budget planning involves staying ahead of your liabilities and dissolving them in a timely manner. If you are a professional, whether salaried or self-employed, you will have to maintain your creditworthiness, which will improve if you repay your debt on time.
No matter what your budget goals are, if they are realistic, keeping your income and expenses in mind, you can achieve them and create a bright future for yourself. Make sure that you also create an emergency fund and prioritise debt repayments, especially on your credit card money, which has a higher interest rate. Follow these tips and start your journey of becoming financially secure.