Controlling finances might be one of the toughest jobs in the world. The more you earn, the more you feel like updating your life. But is it really important to spend the money everywhere? How do you know if your spending is worth it or not?
The answer to this is proper analyzation and creation of a good budget. Budget not only helps in managing the finances better but also being aware of worthful spending. This makes your spending an investment instead of a mere expense or liability. Therefore, let us know how to create a great budget.
1. Become aware of your monthly and year income.
This is extremely easy if you’re an employee with a fixed income. In case you are a freelancer, become aware of the average monthly and yearly income. Being aware can help you decide the further steps better.
2. Note down your monthly expenses.
There are some expenses that remain constant throughout months. These can include food expenses, rent, travelling expenses and more. Calculate and add that all while noting down extra expenses on the side.
Speaking of extra expenses, make sure you keep a check if they were worth it or not every week or month. For example, if you buy a journal for better mental health, make sure you actually use it and be consistent at it. You will know what wasn’t worth it if something is not benefitting even after you use it to a least amount of time. This can be a counterfeit promising skin care product. Know how to differentiate and analyze.
3. Set limits and goals.
After becoming much aware of different things, calculate the average amount of expenses and make sure it isn’t more than 25 to 50% of your income. Limit the expenses under this boundary and you will end up saving for your most awaited trip or dream house etc. In order to set great goals, writing them down while tracking them on a daily, monthly and yearly basis can prove to be highly beneficial. Make sure you have a separate notebook or goal planner for this. They help in setting up the right mental state to achieve the goals. Check out our recommendation below-
