Best Budgeting Tips To Live Your Life To the Fullest

Budgeting as a term has somehow gained a negative connotation in its own in the recent years. Just the thought of creating a budget is enough to make some people groan or break out in a panicked sweat. But a budget can be crucial to understanding — and directing — where your money goes. It becomes even more important if you want to live your life to the fullest with minimum financial constraints.

Unfortunately, this basic and essential skill is not taught in schools. You have to learn it on your own. But by the time most people start understanding what budgeting is really about, they already have lost a lot of time, money and might even be in debt.

So in this post we would be looking at some of the best and crucial budgeting tips you need to know if you want to live life to the fullest.

How Can Budgeting Help Me?

Budgeting essential means a financial plan that tracks all your income, expenditure and liabilities and helps you to allocate your money in a way that you can achieve your financial goals, be it debt free living, or saving for retirement, or paying your home and car loan, etc.

The earlier you adopt budgeting as a permanent habit in your life, the greater benefit it will accrue for you. It can help you in spending intentionally and not by the mere desire of owning or buying something. Once you know where your money goes you can direct it towards your goals.

So, the crux of the matter is, budgeting helps not to spend what you don’t have, live more intentionally and prepares you for emergencies and retirement.

7 Budgeting Tips To Live Life To The Fullest

Ready to get started? Here are the top 15 budgeting tips!

1. Learn Self Control

The best budgeting tip anyone can tell you is not actually a finance secret but a psychological trait you should try to master – Self Control to tell you. If you don’t have time and don’t want to do any other thing, then you can just switch back to your work by knowing only this. Believe me self control can solve all your financial problems.

Control your urge to buy every other thing you like. Know what actually is useful and necessary for you and what is just another attraction. In this era of plastic money, it has become very easy for you to buy anything by just a swipe of your credit card. However, its better to wait until you have saved money for the thing you want instead of buying it on credit. The golden rule of personal finance is – ‘keep your debt line as low as possible’.

If you make a habit of putting all your purchases on credit cards despite not being able to pay your bill in full at the end of the month, then you might still be paying for those items in 10 years. I don’t mean to say that you should not use credit cards or they are bad. Instead, credit purchases actually helps to increase your credit score which might help you when you take a bigger loan either for a house or a car. But using credit cards for emergency purposes only is a crucial tip you should follow.

Read: 6 Personal Finance Tips from Top Billionaires of the World

2. Track Your Money First

Best Budgeting Tips To Live Your Life To the Fullest: Track Your Expenses

If you have not done budgeting before then you should start from first knowing where your money goes each month. Tracking your money means where you are actually spending your income and then categorizing it as either necessary, or incidental or wasteful.

Necessary expenses would be those which you cannot skip, such as paying house rent or electricity bill or buying groceries. No matter how hard you try, you just can’t cut on these and neither you should because the aim of budgeting is not to live by depriving of all that you should have, it is to help you do much more with the same money. Incidental expenses means related expenditure like if you go for shopping you would have to pay for transport as well. Wasteful expenditure are those which you could have avoided, which do not add any additional value to your life. For example, you have a good number of shirts in your wardrobe and don’t need any extra, but you still bought one just because you liked it, is certainly a wasteful expense.

So, pick up your pen and notepad and track your expense for an entire month and include everything even the cost of your morning coffee or tea. This would give you a basic idea of where do you actually spend and then you could control expenses more intentionally.

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3. Remember that Every Month is Different

Some months you’ll have to budget for things like back-to-school supplies or routine car maintenance. Other months you’ll be saving for things like vacations, birthdays and holidays. Regardless of the occasion, make sure you prepare for those expenses in the budget. Keep those special occasions from sneaking up on you by pulling up your calendar while you’re creating your budget.

Be sure to adjust your budget each month as things change. Make a savings fund you can stash cash in throughout the year. When you don’t have a plan, you’re going to be stressed. And that takes all the fun out of living. No one wants that!

You may account for such occasions by starting an emergency fund. It’s wise to find some amount—any amount—of money in your budget to sock away in an emergency fund every month.

Having money in savings to use for emergencies can keep you out of trouble financially and help you sleep better at night. Also, if you get into the habit of saving money and treating it as a nonnegotiable monthly expense, then pretty soon, you’ll have more than just emergency money saved up—you’ll have retirement money, vacation money, or even money for a down payment on a home.

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4. Hold Down Your Debt

Best Budgeting Tips To Live Your Life To the Fullest: Hold Down Your Debt

I believe debt is the only one thing that can disturb all your planning and budgeting and can make your life terrible. So, isn’t it smart to keep debt as low as possible when you already you know how detrimental it could be? Sure it is!

Try to avoid buying anything you can’t afford currently. Learn to live within your means and not living by borrowing. In the long run, these debts can become a huge burden for you with mounting interest along with the principal.

If you already have a debt, then paying it off should be your top-most priority. You may use the debt snowball plan to get rid of your debt. It is a debt reduction strategy where you pay off your debts in order of smallest to largest, regardless of interest rate. 

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5. Create a Buffer in Your Budget

While I have already reiterated the importance of preparing for uncertainties, I think the immense value this single point carries is worth mentioning again.

Put a small amount of money aside for unexpected expenses throughout the month. Label this as your miscellaneous category in your budget. That way when something comes up, you can cover it without taking away money you’ve already put somewhere else. Keep track of expenses that frequently end up in this category. Eventually, you might even want to promote them to a permanent spot in your budget.

Having money in savings to use for emergencies can keep you out of trouble financially and help you sleep better at night. Also, if you get into the habit of saving money and treating it as a nonnegotiable monthly expense, then pretty soon, you’ll have more than just emergency money saved up—you’ll have retirement money, vacation money, or even money for a down payment on a home.

It’s easy to put your fund into a standard savings account, but this earns almost no interest. Put your fund in a high-interest online savings account, short-term certificate of deposit (CD), or money market account. Otherwise, inflation will erode the value of your savings. Just make sure the rules of your savings vehicle permit you to get to your money quickly in an emergency.

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6. Boost Your Cash Usage

Using cash for your daily transactions can actually help you to trim your spending and expenses. I agree using your debit card or credit card for completing a transaction is much more convenient, afterall you just need to swipe you card, put your pin and you are done.

Unfortunately, this convenience comes at a cost. By using plastic, we can begin to lose track of how much money is being spent. Sure, 50 rupees here, 100 rupees there, it doesn’t seem like much at the time of purchase, but if you aren’t careful, they can add up and bust your budget. One trick to help keep your daily spending under control is to use cash instead of your credit or debit cards. It might not be as fast, but it helps you visualize just how much money you’re spending.

When you actually see how much money you are spending, you tend to become a conscious buyer instead of a spendthrift. So, what you can do is, withdraw a certain amount you think you would need to survive for a week and then try not to go over it. Spend till the time you have money in hand and don’t use any of your card and don’t withdraw additional amount. This would help you to limit your expenditure effectively.

Read: 8 Practices to become a Millionaire in Your 20s

7. Revisit Your Budget Monthly

Best Budgeting Tips To Live Your Life To the Fullest: revisit your budget monthly

Checking in on your budget at least once a month gives you the chance to deal with fluctuations in a timely manner. A check-in also gives you an opportunity to talk about money with your partner, if you’re working from a family budget.

You may replan your budget in case the current one isn’t working for you or if you think a small tweak can do the job, you may make minor changes.

It’s important to check your progress from time to time. Look back at your earlier budgets to see how far you’ve come. And don’t forget to celebrate the small wins.

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The Bottom Line

Remember, you don’t need any fancy degrees or special background to become an expert at managing your finances. If you use these seven budgeting and financial tips for your life, then you can be as personally prosperous as someone with a hard-earned MBA in finance. Budgeting can help you achieve all your long term goals without actually cutting your present pleasure.

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Have a topic you want us to cover, put in the comments and we would soon come up with something on the same.

Best Budgeting Tips To Live Your Life To the Fullest

Prashant Tiwari

Hi Peeps!! I am Prashant, a blogger by passion and an entrepreneurial enthusiast. I have written more than hundreds of articles and on a variety of issues and have fallen in love with helping people by means of meaningful blogging and articles. My aim is to add value to all my reader's life. If you feel that this post has benefitted you in any way then do share it with others to help them. Happy Reading!!

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