5 Simple Personal Finance Hacks for Effective Budgeting: Budgeting is essential if one wishes to save more money and spend less. Individuals can determine how much they are spending and how much they can save through budgeting. While there are numerous ways to construct a budget, ZeeBiz has compiled five tips that will help you budget effectively, save more, and spend less.
5 Simple Personal Finance Hacks for Effective Budgeting
1. Golden ratio
This is a straightforward budgeting hack that requires separating expenses into present, past, and future financial timelines. Essentially, breaking down your monthly expenditures by calculating how much of your gross income has been spent on past bills, current bills, and savings. In order to gain perspective, you can determine how much of your income should be allocated to your debt, current expenditure, and future savings by examining your spending history. It can be 20% for past expenditures, 60% for current expenses, and 20% for future savings, resulting in a ratio of 20%:60%:20%. This ratio can be adjusted according to individual preferences.
2. Cash padding
Cash stuffing is a method of budgeting in which you withdraw cash at the beginning of the month (or whenever you receive a paycheck) and place various quantities in envelopes labelled with specific categories. It is intended to prevent you from spending more than your allocated amount in that category.
Workshop on ‘Gender Responsive Budgeting (GRB)’ at Advanced Centre for Women’s Studies
3. Tandem saving and spending
In this exploit, saving and spending are complementary. Simply put, save the same amount as you expend. To put things in perspective, if you’ve spent Rs 5,000 in a week, you should save Rs 5,000 in your weekly savings account.
4. Capacity for halting: 5 Simple Personal Finance Hacks for Effective Budgeting
When online shopping, if an item catches your attention, do not purchase it immediately. Put it in your shopping cart for at least a month, and then reconsider whether you want to purchase it. This trick allows you to avoid unnecessary expenditures.
5. Small savings
This method is the greatest for achieving medium- to long-term objectives. To achieve the objective, you need only set aside a small amount of savings each month. To put things in perspective, if you wish to purchase a car costing Rs 10 lakh within a year (12 months), you must save Rs 83,333 per month.
