Monthly Budgeting for Financial Freedom
If you are reading this, you’re probably going through slight financial stress and searching for a way to gain control of your finances. The best way to do this is to formulate a monthly budget and sticking to it. A sound budget is an essential tool for managing money, one that has allowed me to live well even on limited funds. Managing my monthly budget is one of the most crucial things I do every month, this has allowed me to consistently meet all expenditures, grow my savings, and eliminate debt.
I usually plan my budget for the upcoming month on about the 20th of the current month. This will prepare me with 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 getting a paycheck leads to unessential and impulsive spending before the paycheck ever reaches the bank.
Start your personal budget by outlining all the things that must be paid that month like rent, electricity bills, insurance policies, loan repayments and telephone bills. These are the things I must pay to keep a adequate roof over my head and continue earning money. I like to pad these essentials to create “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 needed. An example are monthly savings deposits, credit card repayments and donations. Don’t get me wrong, some of these things are also necessary, but in case of emergency they can be excepted. By paying 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 overseeing my monthly budget has worked out very well over the long term as long as I observe it conscientiously.
