Creating a monthly budget involves gathering all your financial information, identifying income and expenditure patterns, then setting spending routines and savings goals. Strictly limiting expenses to pre-determined costs is the hallmark of a successful budget.Continue Reading
Work with your monthly net income. To do this, account for statutory deductions first. Savings should be subtracted from the net figure before committing it to the budget. An arrangement with your bank such as a standing order decreases your chances of accessing money meant for savings.
Group your expenditure in recurring, fixed and variable items. Bills, debts, loans, shopping, rent, parking and restaurant checks are examples of expenses that need classifying. Prioritize these before coming up with an average for each group. Rent or mortgage, transport and food items are regular expenses. In contrast, gym membership is a periodic cost that you can choose to pay in annual or monthly premiums.
Next, develop a system to manage your lists. This could be a free or purchased personal finance application or spreadsheet software. With the right skills, you can customize a spreadsheet to your specific budget. Ensure you can see in summary what your income and expenses look like by using summaries of the different categories.
Keep a record of every expense you incur. With a smart phone or printed expense list, you can easily compare expenditure to the budget. File your receipts and bills, as these help you reconcile your accounts.Learn more about Household Budgets