Text Hammer

If you’re reading this article, you are probably looking for a way to have control of your finances. The best way to do this is to produce a monthly budget and sticking to it. Having a solid budget is important for managing money, one that has allowed me to live well even on limited funds. One of the most critical 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 normally organise my budget for the upcoming month on about the 20th of the current month. This gives me a better view of my expenditure in the coming month. It’s not a good idea to prepare a budget after getting paid because, too often, that flush feeling of getting a paycheck results to uneccessary and spontaneous 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 must pay to keep a adequate roof over my head and carry on earning money. I like to pad these essentials 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 unavoidable. An example are monthly savings deposits, credit card repayments and donations. These things are also essential, but in case of emergency I could put them off for a short time. 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 food, clothing, or entertainment. Ultimately, these items get covered by what’s left in the budget. 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 managing my monthly budget has worked out very well over the long term as long as I honor it scrupulously.