Monthly Budgeting for Financial Freedom
If you are reading this, you are most likely searching for a way to gain control of your finances. The best way to do this is to create a monthly budget and sticking to it. A sound budget is an essential tool for managing money, one that has allowed me to survive even on limited funds. One of the most important things that I do every month is organise my monthly budget, this has allowed me to systematically meet all expenses, grow my savings, and eliminate debt.
I usually map out my budget for the upcoming month close to the end of the month. This will prepare me with my expenditures in the coming month. It’s not a good idea to produce 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 includes outlining all the things that must be paid that month like mortgage/rent, utility bills, and other essentials like insurance, car loan repayment, transportation costs, and phone. These are the crucial things that I must pay to keep a comfortable roof over my head. I like to pad these requirements to create “money back” after paying the bills and, if costs increase circumstantially, 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. An example are monthly savings deposits, credit card repayments and donations. These things are also essential, but in case of emergency I could put them off for a short time. By paying 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 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 honor it conscientiously.
