Back to basics: How to create a budget plan

Budgeting is an important skill especially before you start investing. It helps you understand your spending habits, identify areas to cut back, free up more money to invest, and track your progress towards financial goals. Here is a quick guide for creating an effective budget plan:

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• Identify your priorities. Begin your budget plan by listing down what you need to spend on first like utility bills, rent, groceries, debts, and savings. Determine how much you need to allocate for each and the frequency of each expense (ex. monthly, weekly). Understanding what you need to prioritize shows where your money goes and how much you have left for other, non-urgent expenses.

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• Set clear, achievable goals. Your budget plan should be realistic.  You don’t need to start planning for a new house or car especially if this is your first time budgeting. Your goals should be specific and time-bound, like paying off debts within one year or reaching a savings target in three months. 

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• Choose a budgeting method. There is no one-size-fits-all approach. Choosing a method that’s right for you is about following a specific plan without sacrificing essentials like rent, bills, and food. Take the popular 50/30/20 method. These figures are general guidelines and can be adjusted based on your unique situation.

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• Make it a habit. It won’t always be easy to stick to your budget plan so stay consistent as much as you can. Keep records or receipts whenever you spend more than your budget so you can review your expenses and adjust. You can also use budgeting apps or spreadsheets, or automate your bills payment through your banking apps to help you develop the habit. 

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• Be accountable to yourself. Life happens! Unexpected expenses can and will require you to adjust your budget plan—and that’s okay. The key is being accountable to yourself whenever you stray from your plan. Monitoring your spending, even when you exceed your initial budget, will help you learn how to improve and get back on track.

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Budgeting isn’t deprivation, it’s about self-empowerment. Sometimes you may feel intimidated—even discouraged—but budgeting is just like any other skill that improves with practice and time. Focus on sticking to your plan and building a strong financial foundation for the future.

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If you’re short on funds, you can count on SAVii for reliable salary loans to boost your budget. Experience convenience with our low interest rates and quick disbursement by applying in just 3 easy steps:

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‍Apply for a loan