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Make your financial budget more effective
May, 20th 2013

Swelled budget is as bad as an excess fat in your body. Excess fat can be burned by exercise while swelled budget can be taken care of by discipline. Budget deficits are not the problem of Indian government alone. In the modern day life, individuals face similar problems. The financial crisis has become more and more a regular word these days. The mismanagement of finances without proper arrangements of funds leads to panic at the month end.

Clearing your budget with unnecessary burdens helps the friction of fund flow to ease. This not only gives you the freedom to do certain things but it also eases your financial problems to a large extent. Here are some useful tips to clear your budget and make it stronger.

Back to basics:

It’s very easy to talk about keeping a track of expenses, but in reality it is so difficult to follow. Stricter money schedules are more difficult to follow. You can keep expenses in two separate columns for every month. One should be the ‘Necessity’ account, like expenses towards household items and another one the ‘Optional’ account which would contain expenses that you will need from time to time. Keep cash aside for your major expenses like Rent, EMI and Personal Loan ECS. Other expenses that are discretionary in nature are travelling, movie tickets and eating at restaurants, etc. They are called discretionary since they vary depending on the persons handling them. These expenses can be controlled to a large extent.

Smart Use of Online services:

Utilize your net banking and internet services smartly. Automatic bill payment services of mobile phones or the internet or even Electricity payment through online medium can save time and money. In case of savings, you should use the bank’s fund transfer facility also known as NEFT and transfer the amount to separate accounts. This will ensure that you have remaining cash for other expenses. The method can be adopted after your salary gets credited. In case of contingencies, you will have spare funds in your savings account. Pay the other expenses using your internet.

Spend Cash:

People paying cash are often less deprived than the ones using credit cards. Credit card gives you the freedom to spend on unnecessary items which you might not need at that juncture. Cash is spent more wisely than a plastic card. In case of holiday, the lure to spend is further more. Therefore, it is advised not to prefer credit cards.

Shared Responsibility:

Your partner or spouse should share the responsibility of the budget. You should not be the only member in family who would be caring for the budget. Insist that it is equally divided. In case of a non working partner or housewife, her irregular spending habits can make a huge difference in your budget. Make sure that your spouse realizes the responsibility.

Invest Wisely:

Investments in proper asset classes can fetch profits and support your budget. Good investments in Equities, Commodities or safer investment options like Fixed Deposit orPPF can get you good interest and profits. Ideally, reserves should be utilized in a manner in which opportunities in investments can be utilized.

Recording the Transactions:

Recording your expenses and income is a good practice in budgeting and should be followed. Recording of transactions will help you have a re-look at your finances when you want it to. In case of online expenses and transactions, this facility is provided by banks. But if you keep everything in one place and have good record keeping habits, it can save you from a lot of confusion and unnecessary expenses.


Budgeting should be treated as an art. Small favors and changes in your budget can bring wonders to your finances at the end of the month. You will save more and invest more if you follow sound budgeting techniques, some of which are mentioned above.

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