The Budget Talk
posted on Feb 4, 2020 | 345 likes
Let's Do It Weekly
You have created a budget to help manage your spending – great job. The thing about creating a budget is that it should align with your personality.
Creating a budget monthly might seem herculean for starters. If that is the case, consider revisiting your budget once a week, instead of once a month.
Just like the popular saying goes, “The journey of a thousand miles begins with a step”. In the same vein, it will be easier to take the first step by creating a to-do list on a weekly basis rather than monthly.
Creating a budget, while admittedly not the most exciting project in the world, is a great way to take control of your financial life. When you know how much money you have coming in and going out, you can make smarter financial decisions.
Estimating your total weekly income and expenses is a great starting point. Look for ways to save such as: cutting down on eating out; coming up with a set of budgeting goals – like saving for a down payment on a dream house, will help to keep you motivated.
Here’s how to go about budgeting weekly:
List Your Expenses
Get a pen and paper and write out all of your expenses over the past month. This typically includes:
· Cellphone Bill
· Monthly Subscriptions
· Personal and household spending
Total & Schedule Your Expenses
Now that we have listed the previous expenses, total the amount spent over the month and divide it into four to get the weekly amount. Do the same thing with monthly bills, such as water, electricity, or your phone (airtime, data). Once you figure out what your monthly expenses are, create a schedule for when your bills are due.
Divide Your Expenses Into Flexible And Rigid
This step should give you an idea as to whether or not you are spending too much on supple items, like eating out. It will also tell you whether or not your current cost of living, including expenses like rent, is too high for your income.
Subtract Your Expenses From Your Income
So, we have stated the flexible and rigid expenses and what it entails. Now, add up your weekly expenses from both your flexible and rigid categories and subtract this amount from monthly income. If you have money left behind, put it toward savings or meeting your other goals. If you break exactly even, then you have no excess income. If you end up with a negative number, then you need to make some serious budget adjustments.
The point of this exercise is to be realistic regarding what kind of lifestyle you want moving forward. Do you plan to make major investments, like purchasing a house, or would you like to use your funds for travel? Do you want to accumulate your wealth in savings or establish a safety fund and then spend as you like? Budgeting helps you achieve your financial goals.
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