Personal Finance - Budgeting

Many of us are good at managing our finances but few have the habit of monitoring their personal finance through budget system. It is the reality to understand one can achieve financial freedom at the earliest by maintaining the budget process for daily finance. Now-a-days we have many apps and systems to maintain and monitor our budgeting system. This not only allow us to enter the income and expense and see the data, it allows us to plan for the future.

Once a person starts maintaining the budgeting process in their personal finance, he/she will notice the discipline in their spending nature and will ask themselves before spending or buying anything. Budgeting system allows them to keep their requirement and needs shorter as possible. By following this, the investment and saving process becomes very effective. When investing process becomes effective, the compounding plays its role to make them richer and financially free at the earliest.

Budget should be made for all expenses including loan repayment to daily expenses. Few can be Rent / Home Loan EMI, Car Loan EMI, Business / Personal Loan EMI, Groceries, Eating Out, Entertainment, Travel, Fuel Expenses, Shopping, Miscellaneous and so on.

When we have expenses maintained, the most important part is to include the income in our budgeting. Once we start maintaining the income source, we will push ourselves to have more stream of income. Few of the income sources can be Salary, Business Income, Capital Gains (it can be land, stocks or gold sale), Dividend Income, Income from Rent and so on.

Once we start maintaining the income and expenses part on a daily basis, we will automatically push ourself to control our personal finance. Later, this will lead to happier and controlled financial structure.

These days people use UPI payment process for most of the purchases. This easy way of payment process makes people to spend more. This can only be monitored and reduced through budgeting process. Our hard earned money should be kept in a place where it is not easily accessible to spend. UPI is a place where spending is easy. We can follow the below 3 ways to reduce or avoid over spending through UPI.

• It is better if we can avoid UPI payments wherever it is possible and use cash as payment mode

• We can keep a rule to ourself that we will use UPI payment only 2 times a day with a limit to payment

• We link the UPI payment gateway to a bank where we have limited amount maintained and restriction given to the particular bank on spending per day / month

I am not against the easy processing system on payments. However, this should not control us and push us to over spend. These days UPI payments can be done overseas as well. Hence one should be very careful on charges and spending.

Hope this helps the reader of the blog follow the budgeting process on their personal finance and enjoy the investing process and generate huge wealth.

Have a Great Day

B G Nareshkumar