Finally, Modi government has delivered an interim budget. It is loaded with big announcements such as a major income support scheme for farmers, a new pension program for workers, tax relief for the country’s lower middle class and other small measures. However, the timing of such measures makes the budget to look more to boost the government’s popularity ahead of polls that are now just months away. However, whatever the intent, we cannot ignore the impact of these big announcements once approved for implementation.
As a precedence, the budget has already triggered debates and experts are busy in picking losers ad winners. Whether one understands the budget or not, everyone throws light on its impact on day to day life. In fact, it has its impact on all – be a rich, middle class or a poor. To bear this impact, everyone has to readjust and make himself comfortable on financial front.
So, to negotiate the implications of a state or country’s budget one has to do financial planning at his own level. When we talk of financial convenience, then it is all about managing money. And the best tool to manage your money is to prepare a budget.
Basically budgeting lies at the foundation of every financial plan. It’s about understanding how much money you have, where it goes, and then simultaneously planning how to best allocate those funds to realize different goals. Creating a budget always looks just a tedious financial exercise, that too when you feel your finances are already in proper order. But you might be surprised at just how valuable a budget can be. A budget helps you to keep your spending on track. Don’t be surprised to see some hidden cash flow problems uncovered that might free up even more money to put toward your other financial goals.
Once your own budget is ready, you have to stick to it. Straying from budget and spending too much money somewhere else can derail your plans envisaged in the budget. Precisely, budgeting makes you to understand the causes of overspending and you can help put a stop to it. So what is important once you budget your financial planning, is to make sure you follow it.
Since we are in budget time and financial planning for future gets prioritized, this is the best time to relook at the lifestyle. You should just ask himself a few questions. Am I living beyond my means? Am I earning well but still don’t seem to be saving enough? Have I ever thought of how to save most of the money I earn? Once you find answers to these questions, you will automatically see yourself living on a budget, avoiding expensive habits and at the same time developing a habit to save.
For example, a simple thing to do is to record your daily expenses, add them up and if you find that the total exceeds the amount of your income, then that it’s time to cut down on your spending. Once you have come up with a realistic budget, avoid the temptation to overdo when you are out shopping. Cutting back on your day-to-day expenses and resisting temptation makes it much easier for you to save.
Meanwhile, there are certain financial products and services which should be availed only at the time of need. Otherwise any strong budget will get derailed. Most of us fall prey to the lure of credit cards. The convenience of credit cards is hard to resist but if you want to save, pay cash whenever possible. You need to watch out while using your credit cards. However, if you can’t do without a credit card, find a card that does not charge high annual fees and comes with cash saving benefits.
Don’t avail loan facility without a reason. Ensure your borrowing is prudent and need based. You should not err into borrowing just because loans are easily available. It’s important for you to consider your income before raising a loan. Never go beyond you repayment capacity. Ensure total EMI of your loans remains within the range of 35 to 40 per cent of your take home salary. Always remember that your monthly budget and cash flow position is always changeable under the circumstances of repaying a bank loan.
(The views are of the author and not that of the institution he works for)
sajjadbazaz@greaterkashmir.com