A startling revelation of the study conducted by Rent.com suggests that more than 75% of young renters in the age group of 18 – 24 spend more than what they actually earn! Out of them, more than 20% young renters are said to spend more than $100 over and above their income. While some say socializing is taking much of their earnings, some blame to it the eat outs, transportation and such other causes. The study says, basically these youngsters lack in effective budgeting strategies. Effective strategy actually helps everyone to effectively manage their expenses.
The study further points out that more and more youngsters are frequently swiping their credit cards and end up paying heavy interest. As you know, when payment is not made on the debt, then the debts accumulate and that would be the beginning of a tail of problems. This situation could be effectively tackled by proper planning, which actually helps you to manage debt with budgeting. This can also be called as the art of debt management.
Fund build up:
The effective budgeting strategies call for making some hard decisions. One of the hard decisions is to save some percentage of your earnings. You should build the fund to such an extent that it should be sufficient to cater to your living expenses for at least five to six months. At the same time, you can even think of building a separate fund to meet emergency expenses. You may even ask every member of your family to contribute some percentage of their income to this fund.
Identify your needs:
Effective budgeting strategies require that you should be extra cautious on your spending. You may have to stay out of parties or reduce your visits to casinos or to your local clubs. Instead, take a stroll in your local park and that helps you to stay healthy. In short, you should be capable of identifying the needs and try to keep away from wants. Pay your debts and installments promptly and by doing so you can even get discounts on prompt payment. Naturally, this helps you to lessen your burden of debt.
Plug the loopholes:
Making or creating a budget is not making list of your income and expenditure. You should ensure the budget is realistic. You should very closely monitor the expenses and ensure it does not overshoot the budget. This also helps you to locate the loopholes in the budget and make effective use of budget to reduce debt. For example, if you are overspending on food at your workplace, you can think of carrying food from home. This can certainly help you to save a reasonable amount of money. Similarly, when you go on shopping, visit at least two or three shops and this helps you to compare the price of the product that you are looking for. With that you can buy the best product at the lowest possible price.
Teach your kids:
The art of budgeting should be passed on to your next generation. Teach your kids and other youngsters in your family about the art of budgeting. Entice them to plan their expenditure from the day they start earning. That can be a very effective spring board to keep away from the clutches of debts. Check at HTTPS://WWW.DEBTMEDIATORS.COM.AU/PERSONAL-DEBT-SOLUTIONS/BUDGETING/No Comments on Proper budgeting can keep you away from debts