Day Debt

If you’re reading this article, you are probably interested in looking for ways to manage your finances. The best way to do this is to create a monthly budget and committing to it. A sound budget is an essential tool for managing money, one that has allowed me to survive even on limited funds. One of the most critical things that I do every month is organise my monthly budget, this has allowed me to consistently meet all expenditures, grow my savings, and reduce debt.

I usually organise my budget for the upcoming month towards the end of the month. That gives me a heads up about what’s down the road. It’s not a good idea to produce a budget after getting paid because, too often, that flush feeling of receiving a paycheck results to nonessential and impulsive spending before the paycheck ever reaches the bank.

I start my personal budget by listing all the expenses that must be paid on time like, loan repayments, utility bills, insurance payments and motorcar loans. These are the critical things that I must pay to keep a comfortable roof over my head. I like to pad these necessities to create “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 necessary. For example, donations, credit card repayments and monthly sving deposits. Don’t get me wrong, some of these things are also important, but in case of emergency they can be omitted. By giving 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 items 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 handling my monthly budget has worked out very well over the long term as long as I honor it scrupulously.