How and why to budget, not saving every penny
When you start working, you never think about creating a budget. The idea that you need to track every penny of expenses, will be savagery, which nullified the joy of receiving a paycheck.
Budgeting is not fun, even if you fanateesh of Excel and consider myself a digital addict. Budgeting is boring, but it provides you a margin of safety, when the time comes to lift up.
I think that the formation of the budget, especially in our conditions, the duty of each person. But keep track of my expenses down to the penny is extremely tedious. Savings should not be so Intrusive. It is necessary to seek a middle ground. The presence of a clear budget should give you an advantage, not a headache.
Why do you have a budget?
To spend less than you earn. It’s just.
When trades like that you don’t just save and bring your money to the cherished goal. The goal can be anything: a peaceful and secure old age, a new house, vacation in Thailand, the opening of the store. We are saving money for their future, not to work until death. We save money in order to work in a fun and pleasure to live, not knowing needs.
Having an idea about your budget, you will easily be able to plan their future, based on payroll. A month has passed – the money was delayed. How much you will save largely depends on how you built their relationship with their own earnings. Of course, the promotion of different prospects and additional earnings are also important. All trite and simple, isn’t it?
If you have a goal to save, forecasting and expense tracking again. The latter is necessary to keep in mind in order to achieve the first. But all the components are important.
How much you need to save?
There are many opinions about this. Strategies are different, but the most common proportion for budgeting is the 20-30-50 rule, i.e. 20% of their income relates to savings, 30% put in by housing, and 50% spend on myself. If housing is going to cost 35% take from savings – better to take away from the personal needs. And yet it is necessary, of course, not to forget about their realities. If you are a head of Department in any company, to save you will be easier than the student who has no job, no private housing.
Where to start saving? Make a list of their costs. Try to identify the ones on which you can save. This can be anything from buying games on Steam for morning coffee at a cafe near work. If you live with your parents, then do not spend on housing (if no specific agreements, of course). This implies that you can put just half of their income for the future. Do because it you’ll be a great help when you have to move out. Life with your parents is not ideal, but such sacrifices pay off.We think that budgeting is not a perfect solution, but it is necessary. The problem, of course, will be. And it consists in the fact that willpower may not be enough. We often take wrong decisions that affect our well-being. We buy all sorts of rubbish, which is forgotten the next day. We go on about the friends that does not work, but know how to spend parents ‘ money as if they were their own. Or, for example, think of a spontaneous purchase, which emit the «right» kind of gift to the girlfriend that is worth your three salaries. She, of course, pleased, but eat beach-bags left so not cool.
The rule has always been simple: live within your pocket. Don’t think the dark days will pass you by. That’s all.