If you’re reading this article, you’re probably experiencing slight financial stress and looking for a way to gain control of your finances. Producing and committing to a monthly budget has always been one of the best ways to do this. Having a solid budget is important 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 organise my monthly budget, this has allowed me to systematically meet all expenses, grow my savings, and reduce debt.

I usually plan 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 upcoming month. It’s not a good idea to develop a budget after getting paid because, too often, that flush feeling of receiving a paycheck results to uneccessary and spontaneous spending before the paycheck ever reaches the bank.

Managing my personal budget involves listing all the things that must be paid that month like mortgage/rent, utilities, and other necessities like insurance, auto loan repayment, transportation costs, and phone. These are the things I have pay to keep a comfortable roof over my head and carry on earning money. I like to pad these necessities to produce “money back” after paying the bills and, if costs increase circumstantially, 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 may 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 excluded. 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 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 handling my monthly budget has worked out very well over the long term as long as I honor it conscientiously.

This entry was posted on Wednesday, November 25th, 2009 at 7:14 am and is filed under Finance Programs, University of Self Improvement. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.