COVID-19 has brought unpredictability to economies worldwide. During this period, it is vital to practice personal budgeting to help maneuver the uncertainties of the period. 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.
Here are a few tips to assist with budgeting:
- 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. Can you eliminate some expenses? Prioritise what matters most.
- 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, if at all possible, 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 for sure is that we do not know how long this ‘new normal’ will last – watch those 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 put you under more pressure.