The novel Coronavirus has brought anxiety and unpredictability to economies worldwide. During this period, it is vital to practice personal budgeting as a mechanism to maneuver through the uncertainties caused by COVID -19. A budget enables you to set your savings target for the month, track your spending, prioritise your expenses and eliminate or reduce expenses which may be unnecessary. It’s a really important tool because it helps you to ensure that your expenses do not exceed your income.
Understandably, there may be many challenges and anxieties being faced by individuals as a direct result of the COVID- 19 Pandemic, but one can use the time to fully assess their needs and financial situation.
Here are a few tips to assist with managing your budget:
- Create a Budget
So you’ve made a note of where most of your money goes. Let’s use that information and prepare a budget, which is a detailed list of your monthly income and expenses. A budget enables you to set your savings target for the month, track your spending, prioritise your expenses and eliminate or reduce expenses which may be unnecessary. It’s a really cool tool because it helps you to ensure that your expenses do not exceed your income, and we don’t want that, do we?
- Pay Yourself First
The first bill you pay every month should be to yourself. That’s right! Before you pay the rent/mortgage, the cable or electricity bill each month, set aside a fixed amount to save towards your current goal. This guarantees that you will save consistently and will eliminate the risk of spending everything and not having anything left back.
- Avoid New Debt If Possible
One thing is for sure is that we do not know how long this new normal will last – watch the credit card expenses. Watch the home accessory purchases, the gadgets, all those little ‘inexpensive’ things. They add up and will impact your credit card and out you under more pressure to pay off.