We have spoken about budgets several times. A budget is an amalgamation of your monthly income, expenses, savings, investments, financial goals and time frame by which you have to achieve each goal. It is meant to track your income so that you can limit expenditure, avoid wasteful expenses, increase investments and reach your financial goals effectively. However, some things just make it hard to follow the budget. It must be noted that you have to follow your budget no matter how hard it is to follow it. India’s First Free Online Financial Advisory Moneymindz.
- Lifestyle inflation
Lifestyle inflation means increasing your expenses each time your income increases and each time something new comes up in the market like a new gadget, new accessories, new fashion, sale, etc. Each cost a lump sum every year. They eat a significant portion of your money and you will find it hard to maintain your budget.
Solution– Control your temptation and keep just the basic necessities. Nowadays, having a cell phone is necessary to most people. Be content with what you have rather than chase the newest version. If your income sees an increase, invest the extra amount. India’s First Free On call Financial Advisory Moneymindz
- Peer pressure and the desire to keep up with the Jonesses
If you think children and teenagers are the only ones affected by peer pressure, you are wrong. Even adults and senior citizens are affected by peer pressure! Peer pressure to a child may mean having the latest games and the best toys. Peer pressure to a teenager may mean finding the most costly college to study in, going to different countries usually in the West, etc. Peer pressure to adults means “Keeping up with the Jonesses”. Mr. X has bought the latest luxury car; Mrs. X is backpacking throughout Europe, etc. and you are doing neither of those and this affects you. Peer pressure buns a hole in your pocket and harms your budget.
Solution– Avoid peer pressure and don’t get tempted. Millionaires are the ones most likely to avoid conforming to peer pressure. Warren Buffett lives in the same house he bought in 1958 though he can afford much more. Certified Financial Planner Kuber Mindz Moneymindz
- Advertisements play with human psychology and we do nothing to resist
Human beings are greedy by nature. That’s how most organizations make money, exploiting the greed of human beings through advertisements. Greed is fueled by advertisements which are everywhere. Greed never allows your budget to become successful in implementation as you will be tempted by advertisements always.
Solution– Accept the way they make money. But don’t succumb to it. Use your own rational judgment and buy what you need and not what you want. Smart Financial Advisor Kuber Mindz
No matter how hard it might be to follow budgets, you have to follow them. Budgeting allows you to take control of your money and earn financial independence. For more information visit www.moneymindz.com or give a missed call to 022-62116588