Balancing Income and Expenditure

How to Balance Our Income and Expenditure?

To save or to spend, this is a question that goes through our minds during the annual festive and wedding season. Wisdom states that saving money is important to protect ourselves against future worries about money. At the same time, you need not necessarily turn down short-term indulgences because spending on things/activities we want and need can bring us happiness. So what is the balance? You just have to spend responsibly. Consider the below-mentioned pointers for making good spend versus save decisions.

Major pointers to check:

Ensure that you have an adequate emergency fund. You should have an emergency fund that will cover three to six months of expenses. Saving for retirement is a continuous process when you are on the job, so check that the process is a continuous one. Make sure that you do not have debts, especially credit card outstanding, etc.

How can we balance?

There are multiple ways through which one can balance between spending and saving. Let us see a few of them:

Shop smart: Instead of making impulse purchases at high-end stores, shop smart and look for savings. This actually adds another layer of thrill to the shopping process. Nothing feels better than getting that feeling of a shopping reward and knowing you saved money in the process.

Make use of the offers: There is nothing wrong with making a big-ticket purchase, such as buying an item you have always wanted, but consider doing so when brands are offering special offers or discounts.

Sell the things you do not need: If you are just coming out of an uncontrollable spending habit, then you probably have a lot of things you do not use, and they are simply lying around, occupying space. Sell those items/things that you do not need or use. Put half of this money into savings and then have the other half to spend on things you actually need. Repeat this process whenever you have too much stuff, but remember to leave the savings in the emergency fund untouched.

Buy memories instead of things: Instead of buying 'things', one could always think of buying 'memories'. Invest in spending time with your family and deepening relationships with close friends. Money cannot buy happiness, but it can help you spend more time with the people who make you happy.

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First, ensure that you have an adequate emergency fund and that you have cleared your credit card outstanding.

Shop smart and look for savings when purchasing.

Make a big-ticket purchase when brands are offering special offers or discounts.

Sell those items that you do not need or use. Put half of this money into savings and the other half to spend on things you actually need.

Assess your own personal financial situation, examine your current and future spending needs and income, and then spend responsibly. 

Mr. Rashik. C. K, Assistant Professor of Economics, Al Shifa College of Arts and Science, Kizhattoor, Perinthalmanna