The Union Budget failed to provide any tax incentive to help individuals squeeze more savings out of their earnings. Individual taxpayers and financial experts eagerly waited for the Budget to ease some of the pain, but that has not happened. However, it is possible to squeeze more from your existing savings if you take a disciplined approach.
"We All Need A Budget. We are the only person who can know what our money needs to do for us," says Vivek S G, SEBI-registered investment advisor and founder of Wealth Craft, a financial advisory firm.
Here are five ways you can plan your personal budgeting to get the best of the output:
- Differentiate Needs And Wants: It is evident that once you are financially independent, you will feel like living your aspirations like going out for trips or buying expensive gadgets or getting designer bags and clothes. Nevertheless, one needs to "Prioritize between the needs and wants and allocate your resources between different goals," says Vivek. For example, you may have high expenses for medicines and/or medical purposes like visiting doctors for weekly or monthly check-ups for some chronic diseases. People often tend to ignore them just to meet some fancy aspirations like going out clubbing or buying a designer bag. But, such behaviour needs to be avoided, caution financial advisors. Allocate small amounts every month to fund simple pleasures like periodical outings.
- Categorize your expenses: A household or an individual has many expenses in various categories ranging from medicines to bills. Nevertheless, categorising them at the beginning of the month before you start spending will help you keep track. "Categorise your expenses into groceries/household, bills and utilities, child care and discretionary spends," suggests Vivek
- Break Down Your Large Expenses: Apart from daily expenses, every family has significant expenses like buying a consumer good or taking a holiday once a year. Funding any such need in one go can upset your cash flow. "Breaking down your large expenses into smaller parts and allocating for them in your monthly budgets make it easier for you to achieve them," adds Vivek. So, one can set a time limit and start saving a smaller amount monthly for a larger goal.
Nowadays, there are a lot of mobile apps for keeping track of one's expenses. Using such online budgeting tools or creating simple excel spreadsheetS To track your incomes and expenses can help you keep track of your expenses.
Union Budget might not have brought any hope for the salaried individuals, but sticking to these habits may help you.
