A lot of people tend to go month to month on the fly spending until their wallets are empty. That may work for some people or for people with oodles of cash that do not really need to keep track of their cash. Although even people with a lot of money should keep track of it.
A good easy to follow and maintain a budget is the key to ensuring that not only do you cover all your monthly expenses, but you could just end up having some over to save or to splurge. It is also good to see how you are spending and where you could possibly improve your personal finances.
Monthly budgeting tips
Define a clear goal
The main goal of a budget is to help a person have some control over their spending. The goal is not to track our every spent penny it is to help us spend those pennies correctly and more effectively. We do this, so we can get to spend our cash on what is most important to us.
A person can keep track of every single penny they have spent and still come up horribly short at the end of each month simply because they have not defined a clear financial goal.
Starting your budget
The best way to start an effective budget is to first track how you are spending your money. Keep track of what you have been spending for a week or two try doing this from a month end, so you monitor what bills you are paying. The end of the month or payday week is the most crucial week as this is the time a person tends to do most of their spending. So, start your budget tracking from there.
Categorize your budget
There are a lot of places where your spending does not change, or you have a set amount that you pay each and every month. Such as rent, mortgage, car installments, insurances, etc. Expenses that do not change each month you can put into a category such as fixed monthly expenses for example.Another spending that tends to go up or down during the month put into another two or three categories and try to bring the spending of these under control or put a monetary cap on them.
Spending on these would be things like entertainment, eating out, clothes, gadgets, etc. if it is not a necessity try to cut down on the spending on these items and do so only when you have enough put away that they will not impact on your monthly necessities.
A lot of people spend and then save what is left over. This rarely works as there is usually not that much left over to save and it is easy to put it off again until the next month and spend that bit.
So rather put your savings first then spend the rest that way you know you have a set amount put away each month and what you have left over you can spend. It is also a better way of getting those gadgets, clothes and have a splurge on eating out.