Financial and political turmoil has placed the Egyptian economy on the business end of some harsh punishment, making budgeting a way of life for many. The problem is that not everyone knows how to budget effectively.
The trick is to stay calm and plan, rather than improvise as to how you budget. Follow this approach and you can budget better in Egypt and in many other places of the world:
First thing’s first, don’t panic. The financial walls may feel as if they’re about to come tumbling down, but things aren’t always as bad as they seem. If you keep your head, you start to regain control and can work things out.
Gather all your bills
In your newfound state of calm, gather all of your bills and any records of expenditure. You can make life easier on yourself in the first place by keeping them all together in the same place and discarding any surplus paper, envelopes, etc. It’s surprising how many people leave them scattered around the house.
Work out your income
Keep a record of all income. Importantly, think about taxation. Are you paying too much (or too little?), as this may affect your income. For instance, if you’re living in Egypt, you may be able to avoid paying more tax than necessary if your home country has signed a double-taxation treaty with Egypt.
Use a spreadsheet or financial software program to help you with this. You can go old school and use a notepad and calculator, but this may be subject to error. And if you do use a spreadsheet, remember to save a backup copy.
Calculate how much you spend
Know to the letter, or better said the number, how much you’re spending. Keep two records of expenditure, one for regular expenses and another for occasional expenses. Have you taken out a personal loan or do you have car insurance? Do you have a mortgage? Make a note of the associated costs of these, as this will help you make decisions come budgeting time.
Okay, so you know you much you’re earning and how much you’re spending. Now you have to compare the two. Deduct the expenditure from your income. If you come out of it with a negative figure, you’re spending too much.
Set out your budget
It’s crunch time. With all your records in front of you, you can decide where to reduce your expenditure. Remember those associated costs from personal loans and mortgages — why not look for the same financial product but cheaper. Take a look at your car insurance policy — is it considerably high compared to other car insurance providers.
Of course, looking into these can save you a considerable amount of money, but don’t forget also to cut out smaller unnecessary expenses too. These are easier to manage and, if you don’t keep track of them, can add up more than you realize over time.
No matter where you are in the world, budgeting is a question of keeping a clear head. From there you can make rational decisions. You’ll also then be in the frame of mind to make a few necessary sacrifices. You’ll also be surprised at the number of things you thought you needed but then actually find you can do without. Then when the time for sacrifices has come and gone, you can go back to those small indulgences if you wish, and not only will your head be clear but also your conscience too.
Image by 401(K), used under Creative Commons license.
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