Budgeting can feel a little intimidating if you are just starting your journey to financial independence. However, this stuff isn’t actually that scary. It’s not a code you can’t crack. In fact, you can follow these 5 simple tips to ace the art of budgeting.
1. Start Investing Early
It pays to start early. Literally. If you start investing Rs. 2000 every month in an equity mutual fund, it can grow to about Rs 20 lakh after 20 years. Or you can start off with a small amount of Rs. 1000 and let the power of compounding do wonders and multiply your investments over time.
2. Watch Your Taxes
There should be a mandatory course on taxes for college students, right? The happiness of receiving the first paycheck comes with the painful burden of taxes. This is when you realize that a chunk of your income is taxable and if you are feeling completely clueless, start by doing your research on investment plans for tax savings. Our suggestion? Hire a professional to file your taxes for you initially.
3. Keep Emergency Funds
Stay out of financial troubles and save money to use later for emergency purposes. Life is unpredictable and so are our expenses. Instead of panicking when an unexpected emergency hits you out of nowhere, you will have enough to keep you afloat. Put aside a portion of your salary in a high-interest savings account. You can always use LazyPay for your instant credit needs.
4. Set Your Financial Goals
Setting long-term and short-term goals is crucial to your financial health. Goals like saving for a trip, buying a car or even buying that vintage watch, gives you the motivation to keep hustling & work towards achieving it. While you are at it, don’t forget to have long-term goals like saving for retirement.
5. Track Your Monthly Expenses
You might have to put in some extra effort but it’s going to be worth it when your savings come to your rescue at some point in your life when you are running low on funds. Categorise it into living expenses, transportation, OTT subscriptions, groceries, medical, EMI, shopping, etc. and record it in an excel sheet or a diary.
Budgeting is not rocket science. You can track your finances easily if you just put your mind to it.