Planning Your Personal Budget Like A Pro | srei
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Planning Your Personal Budget Like A Pro

It is possible that you haven’t thought about creating a proper budget up until this point. It is after all a skill that is not taught in school or in most homes but in this current economy it helps save your hard earned money and curb your impulsive spending habits. 

The key to mastering your budget lies in having a clear mindset about what it means to live on a budget. Living on a budget is not all about restrictions or ending all the fun, even millionaires have budgets. A well planned budget is your personal ‘Spending Plan’ that lets you finally control your money, instead of letting your money control you. When you look at the benefits of having a budget, or a "Spending Plan," it is clear that you should embrace the concept, not fret over it.

The first most important step in planning out your budget is to list out all your major bills which can be narrowed down to the following:

  • Housing
  • Entertainment
  • Transportation
  • Debts
  • Utilities
  • Educational Costs
  • Insurance
  • Food

 

You can add to your list further categories based on your personal lifestyle and circumstances.  An important thing to remember is that you cannot spend more than you earn. This can and should be established as the #1 rule of budgeting. At the end of the month, you need to place your expenditures into categories.  (That’s why keeping track of what you spent your money on is so important!). 

In order to not feel depraved while on this budget of yours it is important to reward yourself with treats along the way. When we say treats it doesn’t mean something frivolous that you'll later regret spending money on. Let's say you enjoy a hobby, like photography. You should build into your budget a monthly allotment for expenses like film, camera equipment, or maybe a photography class. By rewarding yourself - with modest but meaningful treats - you won't feel like you're being deprived while on a budget. 

Unexpected events and emergencies will always creep up. So plan accordingly for these items to minimize their impact. This also brings up an important point about adding a ‘Savings’ category to your budget, no matter how much or little you may have to save. Something as unexpected as a burst boiler unit or a faulty car engine can ruin a well planned budget. Set some money aside every month to thwart these events with preventative measures, such as regularly servicing your boiler, or having routine maintenance done on your car to avoid breakdowns and malfunctions. At the end of the month reassess your goals.  Don’t be too hard on yourself if things didn’t work out perfectly.  Set new goals, making changes where necessary.