Monthly Budgeting as a Long Term Strategy
If you are reading this, you’re likely interested in searching for ways to moderate your finances. The best way to do this is to create a monthly budget and sticking to it. Having a sound budget is essential for managing money, one that has allowed me to get on with my day to day life even on limited funds. One of the most important things that I do every month is organise my monthly budget, and it has allowed me to consistently meet all expenses, grow my savings, and control debt.
I usually plan my budget for the coming month on about the 20th of the current month. This will prepare me of what’s down the road. It’s not a good idea to produce a budget after getting paid because, too often, that flush feeling of getting a paycheck results to unessential and spontaneous 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. The overall idea is to allocate a budget for the things that I must pay to keep a adequate roof over my head and continue earning money. I like to pad these necessities to create “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 unavoidable. For example, donations, credit card repayments and monthly sving deposits. 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. 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 overseeing my monthly budget has worked out very well over the long term as long as I honor it religiously.
