If you’re reading this article, you’re most likely going through slight financial stress and searching for a way to gain control of your finances. The best way to do this is to develop a monthly budget and sticking to it. Having a solid budget is essential for managing your finances, one that has allowed me to survive even on limited funds. Organising my monthly budget is one of the most critical things I do every month, and it has allowed me to consistently meet all expenditures, grow my savings, and control debt.
I map out my budget for the upcoming month on about the 20th of the current month. This will prepare me with my expenses in the upcoming month. It’s not a good idea to produce a budget after getting paid because, too often, that flush feeling of receiving a paycheck results to uneccessary and impulsive spending before the paycheck ever reaches the bank.
I start my personal budget by listing all the expenses that must be paid on time like, mortgage repayments, utilities, insurance payments and auto loans. These are the critical things that I must pay to keep a comfortable roof over my head. I like to pad these requirements to make “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 unavoidable. For example, donations, credit card repayments and monthly sving deposits. Don’t get me wrong, some of these things are also essential, but in case of emergency they can be left out. By giving 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 food, clothing, or 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 overseeing my monthly budget has worked out very well over the long term as long as I observe it religiously.