by grecy0905 » 26 Nov 2016, 19:39 A budget might sound negative to some because it means it is restricting any expenses you will be having in a month. It is not good to the ears of those who have less knowledge about it. Having a budget is a good help for you to maximize whatever earnings you have and how to minimize spending as well. In this way, you can easily see what the total income versus expenses is so you might want to apply the budget to overall manage your money.
If you budget your money for a month, based on your income and expenses, it really means being efficient. You keep track of your expenses and you have all the control on what area you should be adjusting every month. In order to start this, you need to provide an accurate list of your income and expenses.
How to do a Monthly Budget?
1. Gather all your Monthly Statement. This includes lists of the source of income and expenses. Remember you are doing this budget for this month, for example, so build up a list of present income and expenses.
2. Separate the list of your Source of Income. Whether you are self-employed, businessman, or an employee, you must record where all your money comes from. If you are an employee and you are receiving a salary with a tax deduction, list the net amount rather than gross. It means all the deductions and you will not get lost when you do your budget.
3. Do lists of monthly expenses. Separate a list of expenses covering to all of your expenditure whether it is a car gasoline, groceries, medicine, electricity and water bills, credit card bills, child allowance and school supplies etc. You should be definite to what you are paying and buying every month. You can rely on your receipts that you had the last month.
4. Break down expenses to Fixed and Variable. It is important to break expenses to fixed or variable to make some adjustment of your expenditure. Fixed expenses are those expenses that have the same amount every month like, car payments, car insurance, mortgage, Internet Bills, phone plan bills, insurance and monthly loans if you have. Variable expenses are those that vary every month like groceries, electricity and water bills, gifts, emergency funds and the like.
5. Total the number of income and expenses. When you get the sum of income and you get a more income than expenses, it means you can use the remaining money as your starting savings or continuing savings, however if your expenses are more than your income, it means you need to adjust in some areas around your bills and payments or you will remove some on the list of things you buy in a month such as in groceries.
6. Strictly adjust your expenses. Even if you found out that you still have remaining money from your income after you learned about a number of your expenses, it is still recommended to adjust your expenses and prioritize spending. You still need to adjust something from your expenses to add little to the savings. Just try it for one month and if it works, keep adjusting until the savings add up.
7. Reviewing Monthly Budget. Even if you finalize it, reviewing it again make your monthly budget efficient. In this way, you strictly monitored everything that is written there.
. Ever since I started working, I am doing the budgeting, but this one, with a right format I know I will be doing this regularly, or monthly.
