This Pandemic let lot of us into financial crisis or instability. We are all worried about the stability of income. So I have decided to post some tips on financial planning for individuals from now on. It will be helpful in managing your finance.

Today the tip is regarding budget…
Many of us keep a budget according to which we would spend our money. Now I am going to give a small idea to the budgeting you do. This is called as Zero based budget.

As the name suggests this budget totals to zero. All we need to do is take a paper and pen or open a spreadsheet and start seperating our incomes and expenses. First we should add up the various incomes such a salary, interest from savings and investments if any, business income, etc…

Next we should name all our expenses. Literally name every expense in the starting itself. Like House hold, DTH, Mobile Bill, Food, Entertainment, Medicines, Savings, Investment, Insurance, Car service, Current Bill ,Rent, etc…

Add all the income and total it. Now allocate the total amount to the different expenses you have named. Finally on subtracting the expenses from income our Total should be zero.

It might seem easy but when you sit and start allocating it will be little tough. But no problem on repeating for every month soon you will get the total to zero.

One important point is you can’t keep this budget as same for every month. You must do this for every month seperately according to that month’s income and expenses. Don’t forget to name all the expenses. Since you are starting newly you can keep a column for miscellaneous expenses too. That will help during any need. If no need arises for that money you can add it to the savings at month end.

This will take 15 to 20 minutes of your time. But will be very useful in future. Do it once you will get every expenses accounted and will know where to spend more and where to spend less.

– Thiru