Kareena, a young 30 something woman recently joined as the head designer in a fashion designing company. Even after getting a large pay hike, she still was frequently worried about not being able to save much from her salary at the end of the month. 

Well, in order to save enough by the end of the month, all you have to do is budget, budget and budget. And NO, you don’t have to be a financial expert to do so! Just by spending 2-4 hours at the beginning of every month can help you manage your money for the entire month. By creating a monthly budget, you can calculate monthly expenses, especially that go towards bills, EMIs, rent etc, cut them down and manage them. It will also help you discipline savings. 

To create a budget, follow these steps:

1. Identify your income:

Budgeting starts with your income. This is generated via your job if you work somewhere, if you own a business, take up side gigs, freelancing, and so on. 

2. List your expenses:

Make a list of all expenses you need for the entire month, which includes- necessities like bills, EMIs, rent, groceries etc. and other essentials like investments, insurance, emergency fund etc.. Also list down expenses needed towards subscriptions, shopping, dining out or ordering in and seasonal expenses like any festival (eg: Diwali) or someone’s birthday and any other expenses you want.

3. Set goals:

Before you allocate your budgets to different things, it is important for you to set realistic goals. Start by identifying your short term and long term goals, which can be buying a car or traveling to your dream destination and set a time limit by when you want to achieve this like 1 year or 2 years and the amount required for example, 7 lakhs. This will help you understand how much money you need to save and invest each month.

4. Separate needs and wants:

Once you have listed down your expenses, it is time to separate them based on needs and wants. Your bills, EMIs, rent, groceries, investments, etc. will come under needs whereas your subscriptions, shopping, dining out etc will come under wants. Now it is very crucial to understand the difference between the two. A need is a necessity, whereas a want is something that improves your quality of living. By listing these down, you can consider shifting something from your “wants” list maybe to the next month if you do not have the budget or are planning on cutting down on your subscriptions or shopping sprees.

5. Design your budget with the 50:30:20 Rule of Budgeting: 

– 50% of your income should go towards bills, utilities, rent etc.

– 30% towards shopping, outings, splurges etc. This is your fun fund.

– 20% towards your savings and investments.

6. Put your plan to action and stick to it:

Start executing your plan and make sure you stick to it, in order to achieve your monthly targets.

7. Review your plan regularly:

Now, we understand that there may be some emergency or sudden expenditure for a repair or maybe someone’s last minute planned birthday, for which you might end up spending some money.  Whatever the reason is, make a note of it so that you can adjust this by reducing your expenses somewhere else, or adjust it on your upcoming months budget sheet.

Yes, it is that simple! Check out LXME’s Budget Planner to keep track of your expenses. 

other blogs

best budgeting method
Smart Lifestyle Smart Money September 21, 2023

Mastering Your Finances: Unleash the Best Budgeting Method for Your Personality

Budgeting is a crucial aspect of financial well-being. It’s not just about crunching numbers; it’s about aligning your financial strategy with your unique personality and preferences. In this blog post, we’ll explore budgeting techniques tailored to different personality types, with a special emphasis on the keywords “best budgeting method.” Whether you’re a free spirit, a Mastering Your Finances: Unleash the Best Budgeting Method for Your Personality

By Team LXME
How to start investing in gold with rs 100
Smart Money September 20, 2023

Gold Investment Plan: How to start investing in gold with just rs.100?

Ankita: Hey Shreya, have you ever considered gold investments? Shreya: Gold investments? Don’t you need a bigger budget for the same? Ankita:  Not anymore! You can start with just ₹100. Shreya: Seriously? Can you give me more information? Ankita: Yes sure! Check out this blog by LXME titled, “Gold Investment Plan: How to start investing Gold Investment Plan: How to start investing in gold with just rs.100?

By Team LXME
What to Do in a Career Break
Smart Money September 15, 2023

Restarting Your Career After a Break: Tips for Success

Many women go through a career break for a number of reasons. It can be to support their partner by moving locations or to take care of their little ones. A career break is just a pause button that can be restarted whenever you feel you’re ready. However, the time in-between and during this break Restarting Your Career After a Break: Tips for Success

By Team LXME