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Finance

Why should you budget and how to make the best of it?

Summary: Budgeting is essential for finance planning, enabling you to manage spending, saving, and debt. Learn to create a flexible home budget in six steps, avoid common mistakes, and leverage a smart debit card for success.

18 Mar 2024 by Team FinFIRST

How to Budget

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Priya just got her first job. Excited about a steady income, she wants to start managing her finances responsibly. If you are someone in her shoes, looking for a quick and easy way to create a budget to help track expenses and save money, you're in the right place.

Read on to learn the simple steps to creating a home budget and achieving finance planning to work towards your financial goals.

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Why budget?

A home budget will help you track where your money comes from and goes. This way, you can prioritise your expenses and allocate funds accordingly. Budgeting also helps you identify where you may be overspending. You can make adjustments to ensure that you not only have enough for essential expenses but can also set aside funds for savings or investments.

How to budget?

Here’s how you can create a quick and easy home budget.

List your income
Add your expenses
Calculate your net income
Allocate and prioritise your expenses
Track your spending
Review and adjust

Everybody gets this part right. Yet, you start a budget with good intentions, only to see it crumble a few weeks (or even days) later.

So, let’s move ahead and learn how to budget by learning how not to budget with the help of a debit card.

Ignoring financial goals

Budgeting without a destination is like driving without a map. Identify your goals—vacation, down payment, or retirement—to stay motivated and allocate funds effectively. Here's where a debit card can be your co-pilot. Since debit cards deduct money directly from your bank account, you can only spend what you have. This helps you stay on track to reach your goals.

Overlooking small expenses

All your daily small expenses, like chai and snacks, can quickly add up. Track all your spending, no matter how small, to understand where your money goes and where you can cut back. Debit cards can be your safety valve here too. They –

Help you monitor your expenses in real-time
Are convenient for everyday spending like groceries and fuel, offering the ease of not carrying cash
Offer cashback and discounts, making your everyday spending more rewarding

Rigid budgeting

Inflexibility in your home budget can be detrimental. Allow your budget to accommodate unexpected expenses. Debit cards to your rescue! They allow you to set and adjust custom spending limits and restrictions on the go. You get greater control over your finances and the ability to adapt your budget to changing circumstances.

Falling for lifestyle inflation

As your income grows, so can your expenses – if you’re not mindful. Resist the urge to upgrade your lifestyle with every raise. Allocate a portion of your increased income towards savings and investments. In these cases, debit cards can act as a buffer, helping you avoid unnecessary purchases and keep your spending in check, as –

You can only spend what's available
You can easily manage your transactions and set custom limits

Lack of emergency funds

Life throws curveballs, often unpleasant ones. So, build a safety net—ideally 3-6 months’ worth of living expenses—to handle unexpected costs without derailing your financial goals.

A few debit cards also offer additional security features, such as insurance benefits and purchase protection, to further safeguard you against financial setbacks.

Forgetting to review and adjust

Your finances evolve, and so should your budget. Regularly review and adjust it to reflect changes in income, expenses, and your financial roadmap. Debit card statements can help you provide insights for your budget review. You can see spending patterns and adjust your budget allocations accordingly.

Smart debit card use + realistic, flexible home budget = make sure you’re spending it on the things that truly matter >>> savings + financial freedom + peace of mind!

Also read - 5 Reasons why Metra Trust Digital Savings Account is ideal for you

The key takeaway

Making a home budget doesn’t have to be a chore. Start small, be flexible. Every rupee saved is a rupee closer to your dreams! Leverage Metra Trust Debit Cards for not only budgeting but also higher withdrawal and transaction limits, premium lifestyle benefits, and complimentary insurance cover. Apply now to take control and watch your financial future blossom.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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