12 practical steps recommended by experts to control your budget and reduce your expenses
Budgeting and sticking to it are the first steps toward financial independence, readers' Digest reported.
Your budget is your plan to spend money over the next week, month or year, and is based on the money you earn and the money you spend.
One of the ways to control the budget is to set a clear goal to achieve by the end of the set period.
According to financial adviser Brian Saranovic, in order to achieve any goal in your life, the most important thing is discipline and perseverance, and this applies to financial matters.
As you develop your financial discipline in your life, budgeting is the first step. In every detail of your expenses, your success will always be linked to your ability to set and stick to the budget.
1- Draw your goals It is wise to have a vision of how to manage your money, to be written, and by imagining the results and drawing a mental picture, you are more encouraging yourself to stick to this budget and achieve your goals.
2. Calculate your monthly income The magazine advised you to determine your current income each month after paying taxes, and this is easier than you think, that is, you must calculate all the liquidity that flows into your wallet and write all these numbers with paper and pen or use a smartphone or computer, and you can create a file to record all these numbers .
3. Adjust your monthly expenses You can write on the same page all the expenses that await you monthly, making sure to include all expenses without exception, even entertainment, trips and hobbies, as well as fixed expenses, such as rent of the house, food, services, transport and debt, and if you are not sure of a certain number His appreciation is better than underestimating.
For invoices and services whose price changes from time to time, experts advise estimating the average or average of these amounts, based on what has been paid in the last six months.
4 – live within the limits of your possibilities The magazine explained that after that you will want to compare your total expenses with your income, to know whether you live within your means or you spend more than you earn, and this result can be reached simply through the process of subtracting your expenses from the income earned after taxes, and if the result is negative there are Steps to take.
If the result is positive, it means that you live within your means and behave in good money, in which case the first thing to do as an excess of income is to create emergency savings.
5. Eliminate unnecessary expenses If you live at a higher level than the financial means you need to make some changes, and you should pay attention to the small expenses that do not usually pay attention to them, you, of course, need to continue to buy food and consumption of electricity and pay rent, but you can stop spending money in unnecessary things, Such as subscribing to entertainment programs.
On the other hand, you can earn extra money by selling things you no longer use, moving to a cheaper place, or changing your health insurance terms to make it less expensive.
6. Set a goal and stick to it The magazine reported that in order to be successful you should read your plans or look at them at least once a week in order to motivate yourself, but commitment to the budget is difficult, because you are exposed to all the temptations and distractions of the media and advertising by displaying glamorous products used by people They look happy.
7. Ask for help when facing problems The magazine mentioned that there are many means on the Internet and smartphone applications to help you track your expenses and get advice and guidance, but if you prefer human communication you can get the services of an accountant or financial adviser, and this type of guidance is not necessarily paid for money, as You can get it from a friend or from your wife.
8. Review your previous results It is important to check your progress in your plan and the expenses you have spent and saved in each period. In fact, when we think we should live and enjoy life, we also believe that we should live responsibly while keeping a glimpse of the future, especially the retirement period in which we will not be able to work. And make money.
On the other hand, there are people who check their budget on a daily and frequent basis, and this can be considered obsessive, and the correct behavior is to do calculations and check the budget once a week and monitor your progress towards your goals once a month, and it is advised not to stop controlling the budget and monitor income and expenses even after arrival To retirement, as this organization always remains useful.
9. Anticipate changes The magazine pointed out that it is important to plan all the possibilities and transformations that your life will witness in the coming period, such as having a baby, moving a child to university, or requesting a home loan or to buy a car and other things.
10. Reset your goals With changes in life, sometimes you need to adjust or change your goals too. When there is a baby on the road, you may have to give up your plans to travel on holiday, start planning to rent a larger apartment, and if you have a wife it is important to talk to her in order to set common priorities.
11. Budget adjustment If you are luckier than I expected and got the extra money you should relax and not rush, and first proceed to reset the budget, especially as these positive surprises can be followed by other negatives.
People who are good at budgeting and saving are doing better in the long run than those who quickly abandon their commitment. This is no different from exercising and dieting. Giving up a commitment once you get good results can lead to the same problem.
12. When failing, start saving Experts advise you to write down your total income after paying taxes and set your goals in terms of saving money, and when you get all of these income start taking savings to the bank or invest, then you can spend the rest of the money.
Seeking to adjust your purchasing behavior to adapt to savings schemes is a skill you can acquire. If you are not ready for full discipline, you can start saving first. Posting \$ 5 in a savings fund per period can be enough to make a difference.
Source: American Press