Have you ever wanted to buy something, but your bank account balance indicated insufficient funds? The gap between your savings, needs and wants can be heart-wrenching. If you are one of those who end up spending more than they earn, you need to start budgeting now! Budgeting can close this gap, bring peace of mind, and, most importantly, help you achieve your financial goals minus the unwanted hassles.

There is a lot that’s spoken about the importance of budgeting and how it can help you get to your goals. But it can still be hard to put things into motion. Fortunately, the right budgeting tools can help if you know how to use them right. Read on to find out more.

Importance of Budgeting
 

Budgeting is calculating how much money you need to save, spend, and invest based on your salary. It is an essential component of personal finance as it systematically helps you control your money and plan for your present and future needs.

But budgeting can be a complex process. With a myriad of budget apps and tools in the market, picking the right one for your unique needs can be tricky. If you find yourself in a similar boat, here are some options to consider.

Financial Accounts to Simplify Budgeting
 

• Recurring Deposits
  
  A recurring deposit, also known as an RD, is a term deposit offered by banks. RDs offer you the flexibility to invest money each month. You can select the amount and duration of your investment according to your requirements. Most banks provide a tenure ranging between six months and ten years. Depending on your tenure and age, a fixed interest is added to your investment that helps your money grow with time. This can vary from bank to bank, and a comparison of interest rates is advised. For instance, the IDFC FIRST Bank offers up to 7.75% per annum, starting with an amount as low as Rs. 100/- per month The bank also offers 0.5% higher interest for senior citizens. With such high interest rates, RDs can be good budget planners for upcoming needs.
  
  
• Mutual Funds
  
  It is hard to ignore investing when talking about the importance of budgeting. Mutual funds are one of the most popular investment options for varied goals. Mutual funds take money from multiple investors and invest this money in different market securities, such as stocks, bonds, government securities, etc. Each fund has a fund manager who manages your money, makes decisions on which securities to buy and sell, and overlooks the basic management of the fund. The professional does all the hard work, taking the burden off your shoulders.
  
  You can invest in mutual funds through periodic investments via Systematic Investment Plans (SIPs) or a lump sum.
  
  
• Savings Account
  
  The best online budget tool, a savings account, maybe the easiest option at your disposal. You can use a savings account for your monthly savings. You can also use it to automate your essential payments like rent, bills, etc., for better money management. Moreover, the interest rate on a savings account helps you earn money on your idle funds. Banks like the IDFC FIRST Bank offers attractive and competitive interest rates . Savings accounts can also be used as an emergency fund.

To sum it up

The right financial tools can help you streamline your budgeting needs and segregate essential and non-essential spending categories as well as savings and investments. Make sure you understand your financial goals and choose a product that aligns with your needs.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.