Designing a proper monthly budget plan is one of the primary tasks involved in your personal money management system. Budgeting becomes all the more essential as you need to fit in all your expenses within the salary that you get once a month. Any disparity in the ratio of income and expenditure can lead you to debts. Thus, it an essential task that you cannot surpass by any means. Having a proper monthly budget not only makes duly payments affordable but also makes life tension free.
Thus keeping all these in mind listed below are few of the things that you need to keep in mind if you want to frame a proper monthly budget for your household:
- Have a common date for payment of bills: There are chances of defaulting on loans and bills mostly when there are different dates allotted for payment of bills. It is thus advisable that you set a common date for payment of bills. Just after you get your salary sit down a list down all the bills together. Decide on a date and make all the payments together. This will make things easier and systematic. You can also have some of the bills automatically deducted from your account in order to avoid defaults.
- Allot cash payments for other expenses: The items which are not included in the bills such as grocery shopping, clothes, college fees, phone bills should be paid in cash if possible. This saves you from adding expenses to your credit cards which may further lead you to debts. It is often seen that when you buy with cash you tend to buy less as there is restriction on the cash limit.
- Split up your expenses: Spending all of your money in the first week can give you hard time during the end of the month. A good idea to solve this issue is to divide your remaining salary amount into smaller amounts for each week. You should also keep a check on your spending and stick to the amount allotted for the week. In this way you will not overspend and will also not get into financial crunch at the later period.
- Do not cross your spending limits: Overspending can be a primary reason for getting into financial problems. You should know your income level and should determine your spending limit accordingly. Even if you spend stick to that predetermined limit only and not overspend. Spend in cash whenever possible as that way you will spend less. Have funds allocated for every category of expense and spend only that particular amount.
- Update your budget timely: Sometimes with good offers you can save a lot more than what you actually calculated. However you need to have knowledge about such offers and update your budget accordingly. If at some section you are able to save more allocate that funds for some other section or transfer it to your savings. It is thus important to review your monthly budget from time to time.
Author bio: Jonny Pean is a financial consultant and writer for EasyFinance.com. He helps people to tackle their financial problems related to loans, personal finance management and home equity issues.