If you’re reading this article, you are likely interested in looking for ways to control your finances. Producing and committing to a monthly budget has always been one of the ideal ways to do this. Having a sound budget is fundamental for managing your finances, one that has allowed me to survive even on limited funds. One of the most crucial things that I do every month is outlining my monthly budget, and it has allowed me to consistently 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. That gives me a heads up about what’s down the road. It’s not a good idea to prepare a budget after getting paid because, too often, that flush feeling of receiving a paycheck leads to unessential and spontaneous spending before the paycheck ever reaches the bank.
I start my personal budget by listing all the disbursements that must be paid on time like, loan repayments, utility bills, insurance policy payments and motorcar 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 necessary. These items include monthly savings deposits, credit card repayments, and donations to charity. Don’t get me wrong, some of these things are also necessary, but in case of emergency they can be omitted. By giving credit card companies the maximum instead of the minimum, I keep my credit score high and my debt low.
My budget will not include the cost of living such as food and entertainment. These items 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.
