Going digital, the COVID-19 pandemic has changed a lot about the way we live. For starters, everyone has become a doctor or safety official because of the masks we put on. Like it or not the world has evolved and the way we do things as well. Digital is the norm of the day and businesses are rapidly embracing the trend. Money, on the other hand, is still a necessity and during this new phase, it is necessary that we embrace budgeting. The online market is much more available for whatever we want such that at the click of a button we can make purchases for whatever we want but may not necessarily need.
Budgeting and its assumptions
Budgeting is giving an assignment or task to your money; that is knowing where every cedi goes. Most people think budgeting is going to stop them from using the money they have or that they don’t have the money to budget or that they just can’t budget but in reality. It gives you more freedom and you’ll never know if you’re good at it until you try. By the way don’t you worry about the unexpected situations that are all going to be covered.
The real challenge is to sit down and start writing so thanks to digital there are apps that can track your expenses for you. There are also spreadsheet documents you can use for budgeting.
How to budget
It’s best to budget before the beginning of the month especially if you have a regular income. You’ll need to know your total income and your expenses for the month. Say your income for the month is ¢500. Your expenses are the things that take out your money. Put the most important things first on your list. Examples: food, rent, savings, giving, utilities, transport, are things we can’t live without.
Allocate a percentage of your money to each category or if you know the exact amount needed you can include it.
Include categories for any debt owned and miscellaneous categories and clothing and anything else you can include. For categories like debt you can attack it by paying off bit by bit instead of waiting to accumulate a large amount of cash before you pay off because remember, you don’t know what the next day or month may bring.
Mr. Appiah earns ¢500 Ghana cedis. This is his basic budget for the month of September
Total income 500
Now in case of any unexpected occurrence or even known occurrence like Mom’s birthday he can use the miscellaneous or extras categories to cater for it. What is most important about this is identifying the core needs you have and allocating resources there. That way you can have extra money for the other needs you have.
Other Budgeting advice
Like any other growing journey, budgeting is in a similar fashion. You’ll need to work on it before you become a pro.
Don’t be afraid to cut off some things you do not need or things you don’t need to spend on all the time. For example, you can decide to cook instead of takeout. Buy things in bulk rather than bits if you make some extra cash. That way your expenses in that category can be cancelled off for the next couple of months and you can use that extra cash elsewhere. It’s advisable to use cash, especially in your day to day activities rather than credit cards where you can abuse your budgeting goals.
Also have goals for your money. Everyone’s goals vary. Say, you want to take a trip after every three months you can include that in your budget and allocate the money needed for the trip after every month.
Have an accountability partner if you can’t do it on your own.
Your situation is not like the next person by you. Quit comparing yourself. Set goals for yourself and if you have a family you can do the same.
Don’t forget to treat yourself to something really nice. Remember to have fun with your budgeting journey and finally, be consistent.