How To Create A Monthly Budget For Financial Stability In 2015
The idea of a monthly budget is something most people are not used to, but which is very vital to having a stable financial life and building wealth.
Most people spend their salaries by just dipping hand into their pockets and making payments for various items that come their way even before they get home.
Then the panic mood sets in when they realize the bundle of cash they collected as salary only a few days ago has completely flattened out and itâ€™s nowhere close to another pay day.
You cannot continue to live this kind of lifestyle and hope to be financial stable, or be wealthy. No matter how much you earn in a month, even if itâ€™s a million dollars, you will still become broke before the month ends.
You need to organize your spending and build savings, which you can use to invest. This is one sure way of becoming wealthy.
To be stable financially, it is important to imbibe the culture of making a budget every month to guide what you spend.
The budget will help you to plan your spending and ensure you leave some money for savings after important expenses have been taken care of. It also prevents you from making impulsive and wasteful purchases.
Making a Monthly Budget
Creating a monthly budget is easier than some people think. There are just three steps to it.
Make a list of all expenses that you are expecting to make for the month, such as food, clothing, rent, fuel for generator, fuel for car, medicals, telephone recharge card, electricity bill, home maintenance, furniture, TV subscription renewal, school fees, socials, transportation, etc.
Separate the expenses into two categories: Essential Items, and Extra Items.
Put all important items that you must spend money on in the Essential category. It might be things like rent, school fees, food, savings, etc. Then put others in the Extra category. The
Extra category can be things like recharge card, clothing, and socials.
When you get your salary, start your spending from the Essential Item list. Ensure you have some money, no matter how small, even $10 or $1,000 set aside as savings and deposited into a savings account.
You can even instruct the bank handling your salary account to automatically take a certain amount from your money when your salary is paid and deposit it into a savings account for you.
After the Essential Item list has been satisfied, you can then move your spending to the Extra Item list.
If you follow this simple budget religiously, you will not only be able to spend your money on what you really need and so cut off wastage, you will also be saving money, which will gradually grow into a significant sum that you can use for investment or to purchase an asset in future.