It's your money, you have worked so hard for it, don't let it control you rather control it. A budget is a tool that can help you achieve this.
To budget beginners here are the simple steps to take.
Write down your monthly take-home income. This is the amount you have for the month to budget on. If you have any other guaranteed extra income include it.
Categorize your budget plan and allocate amounts to be spent based on the below recommended percentages.
Develop a habit of paying yourself first if you want to improve your life. Here you are saving for a rainy day. Emergency fund
B. Charity-10% or less.
It's spiritually, ethically and morally right to practice giving.
C. Necessities-up to 60%
Further breakdown according to household needs
- Housing, Home loan or rent, allocate between 25-35%.
- Food, allocate between 5-15%, very much dependant on household size.
- Utilities, take between 5-10%
- Transportation, 5-10%
- Medical/health care, 5-10%
D. Insurance and Investing-10-25%
Think of how you want your dependents to live once you are no more and also set money aside and invest towards passive income streams
Set money aside for your entertainment needs and personal spending.
F. DEBT 5-10%
All your other loans except for your home loan should be here. Credit card, car loan, personal loans.
Remember all your loans should not exceed more than 40% of your net, if thats the case you have over extended yourself and have to work on reducing your debt.
Also, remember the road to your financial fitness starts with controlling every little thebe your earn.
Hope this will help with your monthly budgeting.