Monthly Budgeting as a Long Term Strategy
If you are reading this, you are probably searching for a way to gain 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 important for managing your finances, one that has allowed me to live well even on limited funds. One of the most crucial things that I do every month is planning my monthly budget, this has allowed me to systematically meet all expenditures, grow my savings, and control debt.
I map out my budget for the upcoming month on about the 20th of the current month. This gives me a clearer view of my expenses in the upcoming month. It’s not a good idea to prepare a budget after getting paid because, too often, that flush feeling of having a paycheck leads to unessential and impulsive spending before the paycheck ever reaches the bank.
I start my personal budget by listing all the disbursements that must be paid on time like, mortgage repayments, utility bills, insurance payments and car loans. The main idea is to apportion a budget for the things that I must pay to keep a adequate roof over my head and carry on earning money. I like to pad these requirements 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 needed. For example, donations, credit card repayments and monthly sving deposits. These things are also important, 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 does not include the cost of living such as food and 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 observe it conscientiously.
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