If you’re reading this article, you are probably searching for a way to take control of your finances. The best way to do this is to formulate a monthly budget and sticking to it. A sound budget is an essential tool for managing money, one that has allowed me to survive even on limited funds. Managing my monthly budget is one of the most important things I do every month, this has allowed me to systematically meet all expenses, grow my savings, and control debt.
I map out my budget for the coming month on about the 20th of the current month. This will prepare me with my expenditures in the upcoming month. It’s not a good idea to prepare a budget after getting paid because, too often, that flush feeling of having a paycheck results to uneccessary and impulsive spending before the paycheck ever reaches the bank.
Start your personal budget by outlining all the things that must be paid that month like rent, electricity bills, insurance policies, loan repayments and telephone bills. These are the things I have pay to keep a adequate roof over my head and carry on earning money. I like to pad these requirements to produce “money back” after paying the bills and, if costs increase out of the blue, I’m always covered.
Next, my budget is subjected to a list of discretionary things I need to cover but could live without if absolutely needed. For example, donations, credit card repayments and monthly sving deposits. These things are also needed, but in instance of emergency I could put them off for a short time. By paying credit card companies the maximum instead of the minimum, I keep my credit score high and my debt low.
My budget does not include the cost of living such as food and entertainment. These expenses get covered by what’s left over and that’s that. Some months involve lots of beans and rice, slow-cooker meals, free or cheap entertainment, and only one inexpensive piece of clothing . This strategy of handling my monthly budget has worked out very well over the long term as long as I observe it religiously.
