Nigeria Business & Finance Updates

5 simple ways to budget successfully

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When you hear the word “budget,” you may instantly cringe.

The word alone sounds restrictive and can be the ultimate buzzkill. However, there are ways to manage your budget so that it saves you time and money — and keeps your sanity intact.

Here are five ways to budget your way to successfully saving money.

Be realistic

Budgeting often gets a bad rap because it can feel like a restrictive diet. The key to budgeting effectively and saving money is being realistic.

In other words, try to make room in your budget for things you value, including entertainment. If you need to make significant changes, consider cutting back little by little and enjoying things in moderation.

Just like changing your eating habits, you probably won’t be able to completely alter your spending habits overnight. A well-balanced budget can consider your needs and wants as well as your savings.

Consider automating your savings

Have you ever thought, “Saving is too much trouble”? Luckily, there’s one trick that can ensure that you put aside some money each month: automation.

Consider setting up automatic withdrawals from your current account into your savings account at least once a month. It’s a common goal to aim for saving 10 or 20 per cent of your income, but if that’s too high, try starting with one per cent and working your way up. The key is learning to live with less so that you can set it and forget it.

Consider using online tools

In order to keep an eye on your budget, consider using online tools that can track your income and expenses. Online tools can offer you an easy way to create a budget and track your expenses. The key to successful budgeting is to spend less than you earn, and these resources may help you quickly see where your money is going and where you can cut back.

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It may seem counterintuitive to pay for budgeting software if you’re trying to get your expenses in control, but You Need a Budget, or YNAB, is another option to check out. It can help you set up a budget, save for a rainy day and set aside money for larger, infrequent expenses. YNAB is based on a four-rule system: giving every dollar a job, embracing your true expenses, rolling with the punches and aging your money.

Try budgeting for additional expenses

One of the things that can get in the way of budgeting is surprise expenses, such as car repairs after a crash or an illness. Even recurring expenses like annual insurance payments or paying your taxes may catch you off guard.

It’s generally easier to budget for regular monthly expenses like rent, food and transportation. But all of us have expenses that are hard to budget for, and we’re likely to forget about them until the payment is due or we’re hit with a big surprise.

To remedy this situation, consider adding an extra category in your budget as a buffer for these expenses.

Adjust as needed

A budget is a spending plan that should reflect your life and match up with your goals and lifestyle. In order to budget successfully and save money, try to review your budget every few months and adjust as needed.

This is especially true if any major life events occur, such as a job loss, a wedding or the birth of a baby. Let your budget grow and change just as you do.

Bottom line

Ultimately, your budget should help you reach your financial goals. Putting a plan in place can help you easily track your income and expenses, and also help you save money while keeping your spending in check.

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Although budgeting may seem like work, these tips can help you streamline the process so that managing your money and saving become second nature.

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