Studies have shown that spending planning can have a significant impact on the amount of money we save over time. Financial habits may even explain why some people are richer than others on the same salary.
First, find out how much you earn in total. Then, carefully track every penny spent and separate all expenses into essentials and “luxuries.” This way, you will know where your finances are headed. After that, set clear short-term and long-term financial goals for yourself, distributing your income among different spending categories and savings goals.
There are several ways to budget that can help you keep track of your money.
Rule 50/30/20Allocate 50% of your net salary to necessities (food, mortgage, rent, etc.), 30% to needs, and 20% to savings or debt repayment.
Zero-based budgeting. Plan where you will spend every ruble. That is, you need to pay for something for a specific purpose.
Pay yourself firstMake saving a priority by automatically setting aside money as soon as you receive your paycheck.
Envelope system. Put money in separate envelopes for different expense categories. You can also use inserts instead of envelopes.
Knowing how you spend your money will help you choose the best budgeting technique. If you tend to be impulsive, you may need a more personalized approach that combines commitment to goals with flexibility to deal with unexpected problems.
Source: Ferra
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
