I am always ready to accept that women are really good at accounting and managing finances. They are devoted, and do their job with full concentration as compared to men!

This article is written with one important aspect in mind! What do these words, budget, savings and debt mean? And how should today’s women look at these words? From what perspective?

This post will definitely help you, no matter to what age group you belong!

Whether you are a single mom, an engaged couple, a happy go solo flyer, or a student, it doesn’t really matter!
What matters at the end of the day is how you look at money.

If you look at it as a friend of yours and take good care of it, then in return you will surely be awarded with precious moments of financial happiness!

So, without wasting more time let’s come to the core!

“Budgeting”- the art of managing finances:

In Economics and Commerce, budgeting acts as the basis of everything.

A country needs to make its own budget that explains profit and loss of commodities, imports and exports, inflation and deflation!

An industry needs a budget to track cash outflow and inflow. In fact every single individual and institution needs a well planned budget!

Don’t ever expect to reach financial freedom without an evenly groomed budget. Whether you are single, married, a parent or whatever, you should always have a budget ready in hand that can explain your income and expenses.

What budgeting technique should you use?

You have the 3 most practical- personal budgeting methods open to you.

One is the old school envelope system. The second is the 50-20-30 budgeting rule, and the third is the backward budgeting.

The envelope system is the oldest form of budgeting, where people used to stack away money, in small envelopes carrying names of fixed expenses!

Doing so allocates specific funds to your expenses, and limits your cash flow, which is a good thing!

If you want to go a step higher, then 50-20-30 budgeting is probably the best fit for you.

Simply keep away 50% of your salary for discretionary expenses and utility bills. 20% of your salary is to be put down for savings, and 30% is for your luxury expenses.

These percentages are highly flexible, and you can make it 60-40 budgeting, or 70-30 budgeting, as per your want!
Where 60% or 70% of your salary is to be used for normal day to day expenses that includes even your debt payments, while 40% or 30% of your income is for savings!

Next comes the backward budgeting!

This is the most pro-type budgeting you can use! The central idea of this budgeting is prioritizing your expenses and savings. To give a basic example, utility bills, debt payments, groceries and so on, are your high priority expenses.

Hence keep aside money for these first, and then manage your other expenses.

Some use backward budgeting to improve savings. They keep aside a certain amount each month from their salary for savings, and then use the rest of the amount for daily use!

So, plan your budget today, and bring financial misery to an end!

“Savings”- Determines financial strength:

Most of us get busy in the rush of clearing debts, filling out bills after bills! It’s savings, that we forget to give importance and priority.

With time, you will get old, and your power to work will decrease. So, the savings you do now will compensate for the times when you have no income, or you have to cope up with emergency expenses!

First thing is, when you are doing savings, it should be a form of investment! I mean money that grows, and not remains the same amount year after year!

So money in piggy banks, boxes, under pillow, between bed sheets are all big No No. What I intend here are savings accounts, retirement plans, shares and stocks, and anything that has some sort of return!

The United States Department of Labor has a good pdf on retirement investment tips, to help us out in securing our savings and finances!

“Debts”- The aggressive money eater:

Well now ladies, you got to do something about credits and debts. That hunger for shopping, that desire for mini cooper, that shiney tablet, and this and that, need to go away, if you want your finances in line!

There are things you can afford, and things you can’t. Simple as that! No room for credit, man! Absolutely no room!

Remember, the money you borrow, is someone else’s investment! They will pull back the money from you with interests, and that’s what we call a successful investment!

And that’s how the banks grow richer and richer and we go poorer and poorer!

So, debts are the aggressive money eater, from the debtor’s perspective! One dollar you borrow today, will have to be paid back in two dollars tomorrow!

Beware ladies, debts can really harm you! So grow your money habits to be debt free.

With this I bid adieu and wish you a wonderful, beautiful and super duper life ahead!! Cheers to happy living!!

-Andy

Andy MasakiGuest Writer