Monthly Budgeting as a Long Term Strategy
If you are reading this, you are probably interested in searching for ways to control your finances. Developing and committing to a monthly budget has always been one of the ideal methods to do this. Having a solid budget is important for managing your finances, one that has allowed me to survive even on limited funds. One of the most critical things that I do every month is organise my monthly budget, this has allowed me to consistently meet all expenditures, grow my savings, and reduce debt.
I map out my budget for the coming month on about the 20th of the current month. That gives me a heads up about what’s down the road. It’s not a good idea to develop 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.
I start my personal budget by outlining all the disbursements that must be paid on time like, mortgage repayments, utility bills, insurance payments and car loans. 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 produce “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. For example, donations, credit card repayments and monthly sving deposits. These things are also needed, but in instance 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. These expenses get covered by what’s left over and that’s that. 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 observe it religiously.