It is hard to manage your budget in these times of crisis in which we are facing two tremendous challenges, pandemic and hyperinflation. It is hard to balance your stagnant income with the expenses that are skyrocketing and if you have multiple debts then that will make your budgeting harder.
Budgeting is not just as simple as writing down your incomes and expenses but it is also an art of balancing your income and expenses to achieve more savings in the future. You need to take account everything that may affect your budget such as inflation rate, interest rate and also current events as current events and calamities might drive prices much higher.
Here are some tips that will help us manage and balance our budgets:
Just live within your Net Income
Sometimes, our greatest mistakes is that we live way beyond our incomes. We also do make a mistake in thinking that our gross income should be the one to be used in creating budgets but in reality the one we should consider is our net income or our take home pay. We might earn a salary of Php25,000 a month but remember that there are deductibles such as social security, health insurance and taxes.
You should also consider in taking 10% of your net income and put it into your emergency fund and then you can use use the rest of your net income for your expenses, debt repayment, insurance premium payments, investments and savings. You should always increase your emergency fund as the prices of necessities do always increase due to inflation and medical expenses also skyrockets during a crisis.
Cut Unnecessary Expenses
One we should always do is to refrain from buying unnecessary things unless we have extra money for it. This is one of the main reasons that we become broke because we sometimes prioritize our wants before our needs and we are out of money to buy our needs, we resort to borrowing. With bloating expenses and debts, our life will become more miserable and problematic.
Increase your Income or Find other Sources of Income
One of the solutions that will help us manage our budgets but it could be the hardest one is to increase your income or find other sources of income. It is hard to make your income increase beat the inflation as most of the time, our income is stagnant.
Some ways you can do to increase your income is to find freelance jobs or you can also venture to vlogging/blogging but remember that it may take some time before you can earn considerable amounts of money from this side hustles. If you are good in talking to people, you might also try online selling.
Find Cheaper and Cost-Efficient Alternative
Prices of all commodities might increase rapidly especially those branded stuffs but remember that there is always an alternative which is cheaper and sometimes better than famous brands.
Finding cost-efficient appliances might cost you more upfront but will give you more savings in the long-run.
Manage and Consolidate your Debt
Having a debt is definitely a burden to all of us but the crisis that hit us last 2020 left us in a situation that forced some us to go into debt. Lots of businesses had closed and in turn lots of people became jobless. If you were became unfornate to be infected with the virus then you were in a serious trouble as it is life-threatening and also very costly.
It is very hard to manage your debts especially if you have multiple debts. You have to pay in time but the problem is that your debts might have different due dates and also different interest rates. The best way to get of that trouble is through debt consolidation. Consolidating your debt is the best way to manage your debt rather than having multiple long-term debts to worry about. If you want to learn more about debt consolidation, click here.
You should also research about the interest rates offered by different lending companies before you apply for a loan and find the ones who offer the best terms.
Having your budget well-managed will make your life worry-free and you can have more time and money you can use in other better things. You will also free up more money for other things such as insurance, investments and especially leisure.