If you want to regain control of your finances, in order to ensure that you’re financially set up for the future, it’s well worth continuing reading to discover 5 tips which are well worth following, if you’re interested in setting up a monthly budget!
How to set a monthly budget: 5 Tips to follow
1. Work out all of your monthly expenses
If you’re serious about working out a monthly budget, your first step should be to write down all of your household’s current monthly expenses. As examples, make sure to work out how much you pay in rent or on your mortgage per month and how much you spend on transportation costs and food.
2. Figure out whether there are any expenses which are not worth continuing to pay for
While you may be forced to pay rent or a mortgage, you may find that paying for a monthly cable subscription is now a waste of money, as you can sign up for a Netflix, Hulu or Amazon subscription, for one-tenth the price of an outdated, cable subscription.
You may also find that you’re paying a high monthly fee for a gym membership, which you don’t use, which you may want to consider canceling.
As if you stop wasting money on expenses which aren’t worth paying for, you’ll have far more disposable cash to pursue your dreams such as embarking on an overseas vacation or being able to put a deposit down on your first home.
3. Make sure to save a portion of your monthly disposable income
It’s well worth saving at least 20% of your monthly disposable income. Which will allow you to save for the future, instead of merely living from paycheck to paycheck.
If you’re interested and have an online bank account, it’s well worth setting up an automatic transfer of a portion of your income, to be transferred from your everyday bank account to your long-term savings account. Which means that you won’t be tempted to spend the money which you’ve committed to save.
4. Figure out how much money you’re allowed to spend on luxury items each month
Once you’ve taken away the amount of money which you need to spend on necessities such as food, power and rent away from your monthly disposable income as well as the amount of money which you plan on putting into a long-term savings account you’ll be left with a sum, which shows you how much money you can afford to spend on luxury items per month.
What are examples of luxury items. Luxury items don’t refer to designer branded items but to items which you don’t require to live a basic existence. Examples of luxuries include lunches or dinners at cafes and restaurants, fashionable clothes and alcoholic beverages.
5. Make sure to stick to your budget
Remember that there’s absolutely no point in drafting up a fancy budget if you have no intention of sticking to it!
In conclusion, if you plan on setting up a monthly budget, it’s well worth using the five helpful tips listed above to get you started.
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