12 steps recommended by experts to control and reduce your budget
12 steps recommended by experts to control and reduce your budget
The U.S. Magazine Reader's Digest reported that budgeting and adherence to it represent the first step towards financial independence.
Your budget is your plan to spend money over the week, month, or next year, and it's based on calculating the money you earn and the money you spend.
One way to control the budget is to set a clear goal that it seeks to achieve by the end of the exact period.
According to financial adviser Brian Saranovitz, to achieve any goal in your life, the most important thing is discipline and perseverance, and this applies to financial matters.
As you move to develop your financial discipline in your life, budgeting is the first step, and in every detail of expenses your success will always be linked to your ability to adjust and commit to the budget, here are some practical steps to help you set yourself a financial plan.
1- Draw your goals
It's wise to have a vision about disposing of your money, to be written, and by imagining the results and drawing a mental picture, you encourage you more to stick to this budget and achieve your goals.
2- Calculate your monthly income
The magazine advised you to set your current income every month after paying taxes, which is easier than you think, i.e. you have to calculate all the liquidity that flows into your wallet and write all these numbers with paper and pen or use a smartphone or computer, and you can create a file to record all these numbers.
You must calculate and record all your monthly income (Reuters).
3- Adjust your monthly expenses
On the same page, you can write all the expenses that await you monthly, making sure that all expenses are included without exception, even entertainment, trips, and hobbies, as well as fixed expenses, such as house rent, food, services, transportation and debt, and if you are not sure of a particular number, overestimating it is better than underestimating it.
For bills and services whose price changes from time to time, experts recommend estimating the rate or average of these amounts, based on what has been paid in the last six months.
4- Living within your means
The magazine explained that then you will want to compare your total expenses with your income, to see if you live within your means or if you spend more than you earn, and this result can simply be achieved through the process of subtracting your expenses from the income you earn after paying taxes, and if the result is negative there are steps to be taken.
If the result is positive, it means that you live within your means and spend money well, in which case the first thing to do considering an income surplus is to create emergency savings.
5- Dispensing with unnecessary expenses
If you live above your financial means, you need to make some changes, and you should pay attention here to small expenses that you don't usually pay attention to, you of course need to continue buying food, consuming electricity, and paying rent, but you can stop spending your money on unnecessary things, such as participating in entertainment.
On the other hand, you can earn extra money by selling things you no longer use, moving to a cheaper place, or changing your health insurance terms to become less expensive.
It's important to pay attention to your small expenses that you don't usually pay attention to (Getty)
6- Set a goal and stick to it
The magazine reported that to succeed you should read or look at your plans at least once a week to motivate yourself, but budget commitment is difficult because you are exposed to all the temptations and mental distractions provided by the media and advertising by displaying glamorous products used by people who seem happy.
7- Ask for help when facing problems
The magazine reported that there are many ways on the Internet and smartphone applications to help you track your expenses and get advice and guidance, but if you prefer human communication, you can get the services of an accountant or financial advisor, and this type of guidance is not necessarily paid for, as you can get it from a friend or wife.
8- See your previous results
It's important to lose how far you've come with your plan and the expenses you've spent saving each period, and, when we think we should live and enjoy life, we also believe in the need to live it responsibly while keeping a look at the future, especially during a retirement period where we won't be able to work and make money.
On the other hand, some people check their budget on a daily and frequent basis, which can be considered an obsession, and the right behavior is to do calculations and lose the budget once a week, monitor your progress towards your goals once a month, and advise not to stop adjusting the budget and control incomes and expenses even after retiring, as this organization always remains useful.
9- Anticipating and probabilizing changes
The magazine noted that it is important to plan all the possibilities and transformations that your life will experience in the coming period, such as having a baby, moving a child to university, applying for a home loan, buying a car, and other things.
Your expenses and savings should be reviewed at each time to measure your progress in your financial plan (Reuters) Your expenses and savings should be reviewed at each period to measure your progress in your financial plan (Reuters)
10- Reset your goals
With life changes, you must sometimes modify or change your goals as well, when there is a baby on the way, you may have to give up your holiday travel plans, start planning to rent a larger apartment, and if you have a wife, it's important to talk to her to set common priorities.
11- Adjusting the budget
If you were luckier than you expected and got extra money, you should relax and not rush, and proceed first to reset the budget, especially since these positive surprises can be followed by negative ones. And people who are good at budgeting and saving do better in the long run than those who quickly give up their commitment, and here it is not much different from exercise and diet, as giving up the commitment once you get good results may lead to a return to the same problem.
12- When you fail Start saving
Experts advise writing down your total income after paying taxes, and setting your goals in terms of saving money, and when you get all these incomes, start taking the savings to the bank or invest it, and then you can spend the rest of the money. Also, seeking to modify your buying behavior to adapt to savings schemes is a skill that can be acquired, and if you are not ready for complete discipline, you can first start saving, as putting $5 in a savings fund each period can be enough to make the difference.
