How To Budget

"If you don’t get serious about your money, you will never have serious money.”"

Grant Cardone

The budget aims to bring down the debt to zero and maximize savings to have healthy finances.

It must be noted that for a budget to be successful, it has to have the following three components: It has to be realistic: You cannot expect 100% savings and 0% debt while you have a home loan and a car loan running presently. An ideal budget should be practical. It should accurately capture your expenses and income and establish a baseline for you to work on. Incorporate incremental changes in the budget which will eventually add up to a sizeable change in your finances. It is a long-term project: Budgeting doesn't mean you will see change overnight! Budgeting is making a roadmap with the final goal being financially independent. Set up a Goal: Setting up a budget without a goal is like starting up a car with no destination. You need to first work on your financial goals. Do you simply want to save for retirement? Do you want to increase your income? Do you want to quickly reduce your debt? First, identify your goals and then create a budget around them!

For example, during the previous exercise of determining how much to save for retirement, we came up with a figure of Rs. 39,254 that one needs to save for the next 35 years. So a sample, the budget should first cater to savings and then plan expenses around it.

A sample table showing retirement expenses calculation:

Here is a sample worksheet that shows you how to plan for your savings and expenses:

DOWNLOAD SAMPLE WORKSHEET