Mastering the Art of Budgeting: A Simple Monthly Money Management System
In today’s fast-paced world, managing personal finances can be a daunting task. However, with a simple monthly budgeting system in place, you can take control of your finances and make your money work for you. In this article, we will discuss a straightforward approach to budgeting that can help you keep your spending in check and achieve your financial goals.
The first step in creating a budget is to determine your monthly income. This includes your salary, any freelance or side gig earnings, and any other sources of regular income. Be sure to use your net income (after taxes) when calculating your monthly income.
Next, make a list of all your fixed monthly expenses. These are the expenses that remain constant each month, such as rent or mortgage payments, utility bills, insurance premiums, and loan payments. Subtract your fixed expenses from your monthly income to get a clearer picture of your discretionary spending.
Variable expenses are those that change from month to month, such as groceries, entertainment, and personal care. To estimate your variable expenses, review your spending habits from the past few months and calculate an average monthly amount for each category. Add these variable expenses to your fixed expenses to get a better understanding of your total…
