Monthly Budgeting as a Long Term Strategy
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 committing to it. Having a sound budget is fundamental for managing money, one that has allowed me to get on with my day to day life even on limited funds. Managing my monthly budget is one of the most important things I do every month, this has allowed me to consistently meet all expenses, grow my savings, and control debt.
I usually organise my budget for the coming month towards the end of the month. That gives me a heads up about what’s down the road. It’s not a good idea to develop a budget after getting paid because, too often, that flush feeling of receiving a paycheck leads 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, utility bills, insurance payments and motorcar loans. These are the things I must 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 unexpectedly, 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. Don’t get me wrong, some of these things are also important, but in case of emergency they can be excepted. By paying 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 handling my monthly budget has worked out very well over the long term as long as I observe it religiously.
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