Have you ever found yourself borrowing money from a friend or dipping into your savings to make it through payday month on month? If your answer is Yes, well, you’re not alone.
Keep reading.
Inflation seems to be at an all-time high these days, and it’s a tough game to keep up with the rising costs of living, but then, how do you move from vibes and inshallah budgeting to having a realistic plan to guide you in spending your money?
The answer is intentional and Evaluative Budgeting.
Intentional and evaluative budgeting requires that you consciously allocate your funds towards a particular goal and regularly assess your budget to determine if it’s meeting your financial goals.
For example, supposing your goal for a quarter is paying off a debt. Creating a savings plan called ‘Debt Payment’ and setting aside an automated amount to be paid monthly keeps you intentional while you cover other expenses. Then, at month-end, you review to see if you need to increase the percentage allotted to that course considering your income.
Bills are inevitable; that’s a fact of life. However, intentional and evaluative budgeting acts as a shield against overspending, allowing you to weather the storms of fluctuating expenses. If you’re struggling with budgeting, here are some steps you might consider:
- Adopting the 50/30/20 rule: This rule divides your income into three categories: 50% for essentials (like housing, utilities, and food), 30% for personal expenses (such as dining out, and entertainment), and 20% for savings and debt repayment. It’s a simple yet effective way to allocate your funds wisely.
- Identifying your needs and wants: Distinguishing between needs (essential expenses for survival and well-being) and wants (luxuries or non-essential items) is crucial. Prioritizing needs over wants helps in rationalizing spending habits and cutting unnecessary costs.
- Automate Your Savings: To stay on track with your budget, consider automating your plans. Whether it’s your flexible savings or a targeted goal, connecting your salary account enables direct payments without manual effort. This keeps you disciplined and committed to your budget.
- Track your spending: This can be done daily using an Excel sheet so you can trace where your money goes and quickly make necessary adjustments.
- Tailor your budget to fit your lifestyle. Not everyone’s budget is the same, so it’s crucial to create a plan that suits you and adjust it over time.
- Watching episode 3 ‘Vibes and Inshallah budgeting’ of the money series: Sometimes, practical advice can be found in unexpected places. This particular episode delves into practical budgeting techniques that might resonate with your financial situation and provide valuable insights.
In conclusion, shifting from wishful thinking to crafting a realistic budget demands taking actionable steps, not just talking about it. Begin by downloading the Zedcrest Wealth App today and utilize the autosave feature to protect yourself from unexpected bills.
