Managing My Monthly Budget: a Sound Plan for Financial Peace of Mind
If you’re reading this article, you’re most likely looking for a way to take control of your finances. The best way to do this is to create a monthly budget and committing to it. A sound budget is an essential tool for managing money, one that has allowed me to get on with my day to day life even on limited funds. Organising 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 map out my budget for the upcoming 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 produce a budget after getting paid because, too often, that flush feeling of receiving a paycheck leads to nonessential and impulsive 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, utility bills, and other essentials like insurance, car loan repayment, transportation costs, and phone. The overall idea is to apportion a budget for the things that I must pay to keep a comfortable roof over my head and continue earning money. I like to pad these requirements 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. These items may include monthly savings deposits, credit card repayments, and donations to charity. These things are also essential, but in instance 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 handling my monthly budget has worked out very well over the long term as long as I observe it scrupulously.