BiPartition

Wednesday, November 25th, 2009

Control Your Debt: Produce a Personal Monthly Budget

If you’re reading this article, you are most likely looking for a way to take control of your finances. The best way to do this is to develop a monthly budget and committing to it. Having a solid budget is essential for managing your finances, one that has allowed me to get on with my day to day life even on limited funds. Monitoring my monthly budget is one of the most important things I do every month, and it has allowed me to systematically meet all expenses, grow my savings, and reduce debt.

I normally 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 receiving a paycheck leads to uneccessary and spontaneous spending before the paycheck ever reaches the bank.

I start my personal budget by listing all the disbursements that must be paid on time like, loan repayments, utilities, insurance policy payments and motorcar loans. The general idea is to apportion a budget for the things that I must pay to keep a comfortable roof over my head and carry on 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. An example are monthly savings deposits, credit card repayments and donations. These things are also necessary, 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 does not include the cost of food, clothing, or entertainment. These things 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 overseeing my monthly budget has worked out very well over the long term as long as I observe it religiously.

This entry was posted on Wednesday, November 25th, 2009 at 10:48 am and is filed under Finance Online, World Of Self Improvement. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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