ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Step 1: Calculate your net income. The foundation of an effective budget is your net income. Step 2: Track your spending. Step 3: Set realistic goals. Step 4: Make a plan. Step 5: Adjust your spending to stay on budget. Step 6: Review your budget regularly.

Detailed explanation-2: -The basic rule of thumb is to divide your monthly after-tax income into three spending categories: 50% for needs, 30% for wants and 20% for savings or paying off debt. By regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently.

Detailed explanation-3: -Having a budget keeps your spending in check and makes sure that your savings are on track for the future. Budgeting can help you set long-term financial goals, keep you from overspending, help shut down risky spending habits, and more.

Detailed explanation-4: -At the beginning of the month, make a plan for how you will spend your money that month. Write what you think you will earn and spend. Write down what you spend. At the end of the month, see if you spent what you planned. Use the information to help you plan the next month’s budget.

Detailed explanation-5: -Record your expenses. The first step to start saving money is figuring out how much you spend. Include saving in your budget. Find ways to cut spending. Determine your financial priorities. Pick the right tools. Make saving automatic. Watch your savings grow.