Making budgeting a priority as you celebrate the festive season
The holiday season is all about spending time and celebrating with friends and family, and the best thing you can do is stay within your budget and don't spend any money you didn't plan for.
With the holiday season approaching, we may all be tempted to overspend on travel, entertainment, luxury gifts for our loved ones, and non-essential purchases.
The holiday season is all about spending time and celebrating with friends and family, and the best thing you can do is stay within your budget and don’t spend any money you didn’t plan for.
People underestimate the importance of effective budgeting in financial wellness. You will begin to think about money differently once you understand that it is a tool for achieving your financial goals in life.
You will begin to realize that money is not to be squandered and that each purchase decision must be made with caution and account for.
Financial wellness begins with recognizing your bad spending habits and replacing them with good spending or saving habits.
Instead of asking a friend or family member to pay for everyone’s meal at a restaurant when traveling, split the bill evenly.
Speaking to family or friends about money is still a sensitive subject, but we have included this topic in our flagship program Motheo Financial Dialogues in our financial education programs at Momentum Metropolitan.
According to our independent monitoring and evaluation service provider, this topic addresses critical psychological aspects of spending and saving.
When a married couple lays all their cards on the table, detailing their income and expenses in the form of a household budget, the relationship strengthens and reaching the family’s financial goals becomes easier.
Tracking your spending is the first step in managing your finances; aim to save three to six months’ worth of expenses.
Here are some suggestions to help you get through the holiday season and beyond by making budgeting a habit and sticking to it in the face of temptations and peer pressure:
Make a list of what you earn versus what you spend:
The best way to make budgeting easier is to write down or keep an excel spreadsheet of your monthly expenses before you start budgeting.
Divide your income according to the 70/20/10 rule.
70% of your net income is spent on living expenses such as housing, transportation, electricity, food, clothing, school fees, and maintenance. You set aside 20% of your net income to save and invest in yourself. Furthermore, 10% of your budget can be donated to charity or used to assist family members in need.
Pay off the highest-interest debt first, such as a credit card, home loan, or vehicle finance, while still making payments on your other smaller debts.
Don’t buy luxury items on credit; instead, save for them and pay cash.
Calculate how many months it will take you to buy the item at an affordable monthly cost, then add it to your budget and designate it as a short-term or long-term goal.
Every life event, whether it’s a marriage, divorce, buying a car, or discovering a hobby that helps you relax and find yourself, necessitates a change in the way you structure your budget.
If you are unable to pay your full instalment, contact your financial services provider and propose payment arrangements that will allow you to pay less until you are able to pay more.
Rather than not paying anything, which has a negative impact on your credit record.
Examine your bank statements thoroughly so that you can perform a monthly assessment of how well the budget was followed. In other words, comparing budgeted versus actual spending.
On payday, decide what you need to spend your money on; for example, do not overspend at the grocery store; instead, buy only what you need for your household and pay all of your bills on time.
If you notice that your spending habits worsen at certain times of the month or when you are emotionally depleted, look for healthier ways to boost your morale.
Budgeting may appear to be tedious work at first, but in the long run, it will secure your financial wellness and provide you with peace of mind.
It is recommended that you create an effective budget to manage your finances, track where you overspend, and stay out of debt.
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