Spread the love











29 Shares

Making A Monthly Budget Work For You

Here are great suggestions you can use in coming up with a personal or household monthly budget that will help you make the most out of your financial resources.

Take out and review your most recent pay-slips.

After all, they will help you determine how much cash you actually earn, each month. This way, you will know how much funds you can allocate for covering the costs you incur on a monthly basis, and for establishing a personal savings account or a contingency fund.

For couples or families out there, we suggest you consider and review your combined household earnings. This way, you can determine your accumulated income which you can use not just for supporting the current expenses of your household but also for anticipating family milestones, like sending your children to school, buying your dream car or house, or for preparing for your retirement.

Still, you should remember that there are items in your pay-slips that must not be included in your budget computation. For instance, overtime pay should never be involved in your budget. After all, such income is never stable nor readily available.

Figure out how much cash you spend, each month.

To do this, you should get your hands on the proofs of payment, receipts, and billing statements you received for the past few months. After all, such records and financial files will help you determine the items you actually spend cash on.

Pay close attention to the products or services you cannot live without. And don’t forget to determine how much cash you submit to your lenders and credit card issuers, each month. After all, your credit payments should also be included in your list of expenses.

Calculate your disposable income.

After subtracting your expenditures from your monthly income, you’re now ready to determine how much disposable income you have. This sum of cash should be properly allocated for your personal or household savings account or for your contingency/emergency fund.

It is never wise to tap on your disposable income to buy items you don’t really need. After all, such unwise decision could leave you with meager funds you can use for covering emergency expenses, which will then force you to sign up for high-interest credit programs.

Revisit your budget from time to time.

This way, you can assess the items in your personal or household budget and you can decide which goes or stays in your financial plan. This is very important so that you can easily cut down on products or services you don’t really need and which could cause your monthly expenses to balloon out.

Now, what should you do with the freed-up cash? Well, you can use it for a variety of purposes. First and foremost, you can decide to deposit it to your personal or family savings account, which you can eventually use for supporting an urgent need.

Or, you may decide to use it for gradually settling your outstanding credit card debt, most especially if your existing lines of credit carry extremely high rates of interest and charges. By doing so, you can potentially save a great deal of cash on your interest payments, and in time, you can attain relief from all forms of debt.