By now, you know what you need to make your budget, right? Without a clear idea of what the incoming and outgoing numbers are, your ability to plan in all areas of your life – travel, home, work, getting a new coat that you check every day, with the relief of making sure that your size is all there is still – all this will be complicated. If you need more persuasive arguments, consider this. Do you know that we are all heavily marketed through glossy magazines with rave articles and beautiful pictures of what our lives should look like? A budget can arm you with practical and possible knowledge given your current financial situation and help you decide what is right for you. Perhaps you should start saving up for a sea-green velvet sofa, but apartments in a new building in a Scandinavian style with a view of the city panorama probably won’t pull it off.
Planning And Goal Setting
Each person has their style and lifestyle, so it depends solely on your needs. Set plans for yourself: they can be short-term, achievable within a month, medium-term – they can take several months, and long-term, a year or more. The goal can be to buy something, save a certain amount, or reach a certain income level. It is necessary to remember that this is not a desire: unlike it, the goal has a deadline and realistic and planned actions to achieve it. If you plan to draw up an annual budget after that, you will need to include the fulfillment of your goals – take them into account in the expense item in advance. And then, you need to move according to the plan: control expenses, save money to accumulate the required amount, or gradually increase income.
Personal Budget for The Month
If you want to calculate and plan finances but are not yet confident in your abilities, you can start by drawing up a personal budget for the month. Specialized applications will help with this, such as Zen Money, Mobil’s Budget Planner, or even the Tinkoff Table. Setting their daily spending limits, adjusting their parameters, and prescribing various expense items is convenient.
Mandatory Items
Items of expenditure are mandatory and optional and permanent, periodic, and emergency. Their distribution may vary depending on the lifestyle – over time. You will be able to choose a comfortable format. But you should prioritize some expenses because they are indispensable: utility costs (housing) or rent; payments on financial obligations if any; setting aside a certain amount to savings account if you are saving for something or trying to form an airbag. It is best to do this regularly; household expenses: food, transport, and children’s education. Obligatory but irregular expenses include the cost of car maintenance, personal health, or the purchase of any non-urgent but essential goods.
Income
First, you need to register all financial receipts to understand how much you have. All ways of income should be considered: part-time work, salary, bonus, money from renting an apartment, etc. With fluctuating earnings, it makes sense to form a budget when you know exactly how much you have, for example, when the money is received on the card.
Expenses
The first items to be entered are the items of expenditure, without which it is impossible to do without. This list will look something like this:
- Food (including lunches at work if you eat at the cafeteria)
- Communal payments
- Directions
- Mobile connection
- Internet
- Household chemicals
Naturally, the list of required payments will be different for each person and each family. The cost of gasoline can replace fares. People with chronic diseases will consider spending on medicines. The same list will include loan payments, kindergarten fees, etc. At the same time, the traditional trip to the cinema on Saturdays and similar items of expenditure are not mandatory.
If You Have an Unstable Income
There are three ways to predict income with irregular income: You are sure that you will receive a monthly amount sufficient for life, although you do not know its exact amount. Calculate your average income and utilize it to calculate. If you earn more than the projected amount in any month, move the excess to the piggy bank. You will get into it if you earn less than average. You don’t have a steady income, and you’re unsure what you will have. It is better to take the minimum income as the basis for calculations. In this case, budget planning will become a task with an asterisk, but there will be no financial surprises. Part of your income is stable, but the exact amount of earnings is difficult to predict. For example, you receive a fixed salary, and the availability of a bonus depends on many factors. Then it is worth planning the budget so that a stable income covers all primary needs, and you will spend on the rest according to the situation.
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