Control Your Debt: Create a Personal Monthly Budget
If you’re reading this article, you’re probably looking for a way to take control of your finances. The best way to do this is to produce a monthly budget and sticking to it. Having a sound budget is essential for managing money, one that has allowed me to live well even on limited funds. Organising my monthly budget is one of the most crucial things I do every month, and it has allowed me to systematically meet all expenditures, grow my savings, and control debt.
I normally plan my budget for the upcoming month towards the end of the month. This gives me a better 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 receiving a paycheck leads to uneccessary and impulsive spending before the paycheck ever reaches the bank.
I start my personal budget by outlining all the disbursements that must be paid on time like, loan repayments, utilities, insurance policy payments and auto loans. These are the critical things that I must pay to keep a comfortable roof over my head. I like to pad these necessities to make “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 needed, 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 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 managing my monthly budget has worked out very well over the long term as long as I honor it religiously.
