As budgeting is a skill that many individuals lack, it’s well worth continuing reading to discover a simple fool proof guide to creating a realistic, workable monthly budget.
Helpful budgeting tips:
Make sure to adjust your budget from month to month:
Many individuals make the mistake of trying to stick to the same budget from month to month. However as your expenses will differ greatly from month to month, it’s a great idea to adjust your budget from month to month. As an example, you may want to allocate extra funds to purchasing Christmas gifts for your loved ones in December. Or you may have to make adjustments to your budget if you find that you have to pay for your car to be fixed.
Think carefully about your current long term goals and how they will influence your monthly budget:
As your long term goals change, you may also need to make key changes to your monthly budget. As an example, if you decide to take out a mortgage in order to purchase your first home, you’ll need to make paying your monthly mortgage repayments one of your key priorities. In fact you may have to decrease the amount of money which you spend on luxury items such as new clothes and takeaway coffees, in order to pay for your mortgage repayments.
Calculate your daily expenses at the end of each day:
If you wait until the end of each month in order to assess your budget, you may receive a rude awakening. Especially if you’ve spent the majority of your disposable income on luxury items and don’t have enough money left to pay for your necessities such as your utility bills. Instead, it’s a great idea to take a look at your online bank account at the end of each day, as well as any paper receipts which you may have accumulated. So that you’ll be able to make any necessary adjustments to your spending, for the rest of your month.
Think twice before making purchases which exceed $200:
If you’re prone to making impulse purchases that you don’t really need and will most likely regret, it’s a wise idea to think twice before making any purchases which exceed $200. You may even want to go as far as waiting 24 hours before purchasing a luxury item which is priced over $200, such as a brand new smart phone or a pair of designer shoes. As you may be surprised at how you feelings about a product that you’re coveting may change over a 24 hours.
Show your budget to the other members of your household:
By showing your budget to the other members of your household, such as a partner, they’ll be far more likely to encourage you to keep to your budget. As an example, if you have a particularly tight budget once month, your partner may encourage you to cook at home, instead of going out for meals. Which will help you keep to the budget that you’ve set yourself.
So if you assumed that sticking to a monthly budget had to be a difficult task, think again. If you start of by following all of the budgeting tips listed above, you should have no trouble sticking to a realistic monthly budget.