It’s The Little Things That Count
When it comes to crafting a budget, you may just be so blinded by hip, tech-savvy, buzz-word-infused jargon that you’ve altogether forgotten the robust, workable basics – the unbreakable classics. Here are some time-old tips on how to go about drawing up a good, solid budget.
First, mull over this: how do you know you’ve missed the target, if you haven’t even got one?
Whether you scribble it on a napkin or chart it out on Excel, your budget will be of little value, if you don’t have precise numbers. In order to craft a worthwhile budget, it’s essential you calculate all of your expenses, down to the premium cup of coffee you secretly treat yourself to every Friday.
The reason being, this is the only way to get a bigger-picture perspective of the in-comings and outgoings of your money.
Secondly, you need to give your budget a monthly nip-tuck to ensure it remains relevant.
Your needs may change with the seasons, unpredictable economic tides, medical emergencies crop up, the petrol price drops, your cellphone is stolen, your long-lost, great-great aunt leaves her fortune to you, etc. As such, that budget of yours needs to be tweaked at least once a month – a small price to pay for financial security.
Divide and Conquer
Divide your expenses into two categories – variable and fixed expenditure.
Fixed expenses are automatically debited from your account, such as your bond repayments, insurance premiums and car finance instalments. Remember to factor in your pension fund and retirement annuity contributions if applicable.
Get comfortable with the fact that you can’t play around with your fixed expenses – there is absolutely no wiggle room for cutting back on these.
On the other hand, variable expenses are a different kettle of fish. These supple, bendy expenses have the capacity to make or break a budget, as they will dictate any changes you need to make from month to month.
Here’s where the genuine, real-deal budgeting part comes in – you need to record, monitor and bend these costs to your will. Variable expenses comprise everything from groceries to leisure pursuits, toiletries and impulse buys.
Cash Clairvoyance
Carry a pocketbook and jot down your cash purchases as you go about your day. The chronicles of your disappearing bank notes will endow you with second-sighted money sense. The cash-gushing leaks and cracks will at once light up, as if you’ve decoded the matrix, allowing you to pick them out and seal them up.
Printing out your bank account statements should not be confused with crafting a pensive, authentic budget.
Your pocketbook and statements are raw materials from which you can craft a meaningful budget. By plotting out a clear, illuminated path forward, you’ll be able to taste your financial goals, while sticking to the stepping stones will become second nature. With the fundamentals in place, the rest will follow and fall cosmically into place, enabling you to make it rain rands!
