A lot of people often speak of the desire to achieve financial freedom. More often than not, these people underestimate the steps required to achieve this. Despite this, there are ways to manage your budget effectively which may leave you with extra cash at the end of the month and s step closer to becoming financially independent.

Any financial guru will tell you that one of the first things to keep in mind, if you are serious about finding ways to manage your budget effectively that is, is that you need to learn to spend less than you make.

It also helps to have a clear goal for your budget. The main reason that your budget exists is to provide clarity on how you are spending, saving and investing your money. While most people may equate budgeting with excessive frugality, the reality is that it’s a tool for simply controlling your spending. Your budget exists to make sure that you spend on what matters most.

Tracking your spending is a useful way to gain insight into your spending patterns. By observing these patterns for at least a month, you may be able to see which areas require instant intervention. If you’re spending R60 on coffee and lunch daily at work, this will reflect as a hefty R300 every week in your budget. You could find more useful ways of allocating this money to your budget every month.

Limiting the amount of credit you use is not only great for your credit score, but it has a psychological advantage of ensuring that you know that you are spending your own money and aren’t liable for excessive fees. Switching from using a debit to a credit card usually does the trick.

Save first and you’ll be less likely to spend up your savings during the month. This can also become easier if you use budgeting tools like apps which categorise transactions and make it simpler to transfer money to savings and investment accounts. This of course needs you to have some solid financial goals set, along with regular budget reviews.

Remember that consistency is key.

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