Valam
Most budgets fail for one reason: they are too strict to live with. A good budget is not a punishment. It is a plan that tells your money where to go before the month begins.
Step 1: Start with what actually comes in
Write down your take home income, the amount that reaches your bank account. If your income changes each month, use the lowest of the last three months. This keeps the plan safe in a weak month.
Step 2: List the bills you cannot skip
Rent, EMIs, insurance, school fees, utilities and minimum card payments come first. Add them up. These are your fixed costs, and they are due whether or not you feel like paying.
Step 3: Pay yourself before you spend
Decide a savings amount and move it on salary day. A common starting point is 20 percent of income, but even 5 percent builds the habit. What matters is that it happens first, not with whatever is left.
Step 4: Give the rest a job
What remains is for food, travel, fun and everything else. Split it into a few categories you can remember. Fewer categories are easier to keep.
- Needs such as groceries and transport
- Wants such as eating out and shopping
- A small buffer for surprises
A worked example
Say you take home 50,000 rupees. Fixed bills are 24,000. You save 10,000 first. That leaves 16,000 for everything else, which is about 530 rupees a day. Now every purchase has a clear answer: is it inside the 530, or not?
Step 5: Review weekly, adjust monthly
Look at your spending once a week for five minutes. If a category keeps overflowing, the budget was unrealistic. Change the number, not your self respect.
Valam calculates a safe to spend figure each day from your income, bills and goals, so you do not have to do the sums yourself.
#budget#saving#monthly planning
