Do you struggle with sticking to your budget on a monthly basis? You are definitely not alone. With new products hitting the market so regularly, endless marketing campaigns and advancing technology that allows you to make purchases from your laptops, tablets or smartphones wherever you are, most of us end up spending way more than we should. It looks something like this:
A few impulsive decisions and boom! There goes your budget. It’s difficult to curb your enthusiasm, especially right after payday. One great way to tackle this temptation is to cut it at source. By that I mean limiting yourself to your budget by stashing the excess away, where it is not easily accessible.
Most people have their monthly paycheck deposited into a checking account, where your earnings become immediately accessible with a debit/ATM card or cheque book. The first thing you should do is open a savings account which you cannot access through an ATM or debit card. Why not request your employer to transfer your salary to that account? Only transfer a budgeted amount to your current/checking account every month so the rest is safely stowed away. If your employer does not agree to help you with this, just do it the other way around. All banks allow you to set up monthly automated transfers between your accounts. This way, allocate a certain amount to savings and have that automatically transferred, out of reach, every month. This way, if you ever go over budget, you will know exactly when and why. It may be that you set yourself too tight a budget or could not control yourself a certain month. Whatever the case may be, learn from your spending habits and budget accordingly.
Cash is King
I am all for technology and the paperless economy. I believe cheques should be rendered extinct in today’s world and all payments should be processed electronically. I am a realist however, and I understand that I am unlikely to see such an environment in Pakistan during my lifetime. The biggest downside of this progress in technology is that electronic transactions can be hard to keep a check on especially when your spending is in full swing. A couple of swipes here and there, a couple of clicks online and before you know it…
Yeah, I know the feeling. If you’ve experienced something like this before, you need to go back to basics. Give yourself a weekly or monthly cash allowance for your regular expenses. The sensation of spending money in cash is entirely different (and terribly more painful) than when you spend using your card. You may even want to consider keeping envelopes labelled with each expense such as “mobile phone bill”, “fuel for the week” and only using them when required. What a rustic way to deal with things. It can be extremely effective though, since it becomes more obvious when you run over budget, and will help you allocate your budget more effectively.
Kar Lo Compare!
You might find bargain hunting annoying and cumbersome. You would definitely find people who are bargain hunters annoying, especially if you are out shopping with them. The bottom line is, those people are probably better off in the long run. It is always helpful to do a few price comparisons before you decide to buy something, especially if it is not a routine item. Hunt for the better deal. Maybe there’s a discount coupon out there somewhere? There’s two benefits to this. You might save by finding a better deal of course. On the flipside, controlling your impulse in that very moment may be enough to make you reconsider whether you really need that product in the first place. When it comes to meaningful financial decisions such as getting a credit card, insurance or a loan, it is vital to invest your valuable time in order to make the best possible decision for yourself – and we can help!
Technology and retail are moving extremely fast these days, and the forces pulling on your wallet are endless. The idea is to slow down the process of spending money so you get more time to think and be rational. Make shopping harder for yourself so you only buy what is necessary and limit the “fazool kharchi”. Of course, you must treat yourself from time to time, but make saving and securing your and your family’s financial future the priority.