Budgeting, although easy to grasp as a concept, is not always so straightforward to replicate in reality.
There are many regular constraints that your budget has to account for, as well as a variety of unexpected
ones. When it comes to budgeting for real-world situations, many people are not confident enough to even know where to begin. Below are some practical ways you can get started today.
Asking for help with your finances is not a demonstration of giving up; it is actually a smart move to make
sure you’re making the most out of your money. By seeking advice from experts such as Positive Solutions Finance, you will gain a thorough insight into real-world situations that may impact you financially, from people trained to budget your finances. Financial professionals will also help with debt consolidation so your money is more appropriately utilized for
Know Your Salary
Before you can even begin forming a budget, you have to know your salary and know it well. Understand
what amount you are actually taking home each pay cheque minus any superannuation, taxes, and
education repayments. As well, take a detailed approach to know your expenses and what you are going
to have left over. From this unallocated money, you will be able to know exactly how much you can
realistically commit to saving for unexpected situations.
By knowing your salary and understanding what expenses you have to deal with, you will gain a more
accurate insight into what miscellaneous money you have left over. You have to prioritize this. It’s this
additional money that you need to consider budgeting into your finances to deal with real-life situations.
Buying new clothes or technology might be nice, and you may even be able to afford it with your next two pay packets, but before you commit to a purchase, weigh up the financial pros and cons of doing so. This money may be put to better use elsewhere.
Have an Emergency Account
Real-world financial situations are broad and varied so it is impossible to predict the outcomes of every
single one. This is where budgeting money towards an emergency account can be extremely beneficial.
By having a separate account for unexpected expenses you are less likely to use these funds for nonessential items. It also helps if you budget a specific amount for each payment to automatically be deposited into this account.
Budgeting for real-world situations should be a priority for everyone, as you never know when you are
going to need the extra money. The unexpected can happen to anyone, anywhere, and being prepared for
this will make the situation a lot simpler to deal with. The most important point to remember when
budgeting though, is to budget realistically and to not over-allocate funds you don’t have.
What have been some unexpected real-world situations you’ve had to deal with that you wish you had
better prepared financially for? Discuss your answers below.