Control Your Debt: Create a Personal Monthly Budget
If you’re reading this article, you’re most likely searching for a way to have control of your finances. The best way to do this is to produce a monthly budget and committing to it. A sound budget is a fundamental tool 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 outlining my monthly budget, this has allowed me to consistently meet all expenses, grow my savings, and control debt.
I map out my budget for the coming month close to the end of the month. This gives me a better view of my spending in the coming month. It’s not a good idea to develop 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.
Managing my personal budget involves listing all the things that must be paid that month like mortgage/rent, utility bills, and other necessities like insurance, car loan repayment, transportation costs, and phone. These are the things I have pay to keep a adequate 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 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. These items may include monthly savings deposits, credit card repayments, and donations to charity. Don’t get me wrong, some of these things are also important, but in case of emergency they can be left out. 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 living such as food and 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 overseeing my monthly budget has worked out very well over the long term as long as I observe it conscientiously.
