What Is a Monthly Budget?
A budget is a financial arrangement of money over a defined period of time. It is the way to balance income, expenses, and measure financial goals. A budget is also a strategic plan for personal needs, households, companies, government, and other organizations that allocates cash flow. You may compile these in a budget report. A budget could be specified into daily, weekly, monthly, and annually.
A monthly budget is a monthly spending plan that is based on your income and expenses. A monthly budget is a proposal for you to write down different decisions on how you will spend your money each month and it also helps to you make sure you will have enough money by the end of every month. Without a budget, you might run out of money before you even notice it. With the help of the monthly budget, you will be able to decide what you must spend with your money with. You will also be able to gain more extra money to buy something more expensive or for emergency uses. A monthly budget can either be a personal budget or a business budget.
How to Write a Monthly Budget
Developing a monthly budget is a very challenging task that must come with self-discipline and perseverance if you really follow it. The purpose of making a monthly budget is for you to be guided with your expenses throughout the month. To help you keep track, make use of a budget calendar. Here are the following tips for you to be guided on how to write a monthly budget.
1. Define your Goals
To define your goals, the very first step is to make a list of the following expenses that you usually use with your money in a month. It is best to break down your goals into S.M.A.R.T (Specific, Measurable, Attainable, Realistic, and Time-bound). Write your goal in a specific way. Make sure that everything must be measurable in a way how to identify the amount you needed. Make your goals very attainable for you. Always want your goals to be realistic and practical enough for you to make things happen for real. Your goals must be time-bound that is chasing a deadline. Always think about how you manage your sample budget pretty much the same as managing your time.
2. Estimate your Income
Ask yourself with this, "What are my sources of income?". List down all of your money from your different sources of income including from your job, bonuses, bank accounts, student allowances, money from parents, and so on. Don't forget to include your passive income, too. Add everything to see your total income for a month.
3. Compare your Income and Expenses
Now that you have estimated your monthly income, develop a budget plan. Compare your income list into your list of expenses you made from the first step. Try to observe which list has the greater amount. If your monthly income is greater than your expenses, you will have some extra money each month to be able to save for other purposes. If your monthly income is way much lower than your expenses, you can either lessen your expenses or try to earn more income. Some people would even want to lessen their expenses even with their incomes are greater. Everything depends on your decision.
4. Allocate your Expenses
Budget your expenses for you to easily develop your goals. Your main goal here is to allocate your income to a personal budget category. Think about your wants and needs. Your wants are the stuff you only wanted to have such as the internet, more fancy attire, gadgets, and so on. On the other hand, needs are something you have to live with such as shelter, utilities, food, clothing, and other important items that are necessary for our lives. It is always best to check your income first before spending them with your different expenses.
5. Stick to Your Monthly Budget Planner
There are many ways for you to keep track with your monthly budget like Google Sheets or any applications. Evaluate your monthly budget if you are making some progress every month. You also need to stick with your own budget. You can always make adjustments if you want to. Everything must come with determination and you will achieve your goal in no time.