How to create a budget that works for you

Many of us check our bank balances only to be saddened by how little money we have in our savings. Maybe you can do without takeout four nights a week, or maybe you can’t, no matter what your income, there is always a way to save a little extra money at home. end of the month.

You will need to define a savings plan

Do you have a goal that you are budgeting for? You might have a vacation to save or a wedding. Whatever the occasion, you can start saving in small amounts, and by the time you’ve spent the money, you’ll have plenty in store.


There is a school of thought in budgeting that allocates 50%, 30%, and 20% of your income. You’ll spend 50% on your monthly bills and food costs, then 30% will go towards saving money for an event or saving for retirement. Finally, 20% will be the money that you are allowed to spend and have fun. It’s not set in stone and you can tweak budgets slightly, but it’s a general rundown, to start with.

Remember to keep it simple

Sitting down and evaluating all of your expenses can be intimidating, so be sure to break everything down into simple jars to start. You just need to start with a general category of ‘bills’, and as you become more familiar with your savings plan you can start breaking them down into subcategories such as ‘rent’. , “ food ”, etc.

How to create a budget that works for you

Do not exclude any expense

If you want to be in control of your finances, you’ll need to be honest with yourself. Keep receipts for everything, even that donut you snuck into at lunchtime, it all adds up. Of course, you should be entitled to a donut every now and then, but you can allocate part of your budget to “donut money” if you want, you just need to know how much to allocate. For annual expenses, like insurance, divide the annual sum by 12 to get a breakdown of your monthly costs, this will help you with your monthly budget plan.

Always watch your spending

Once you get started with regularly checking your finances, you can begin to change your spending habits if they are not sustainable within your budget. Try not to change the budget but rather your spending habits, that way you will be more likely to stick to the budget instead of breaking it often. Make sure, when setting your budget, that you give yourself some leeway for emergencies. There is no point in spending the maximum amount of your income because you will not have it in reserve when you need it.

How to create a budget that works for you

Plan spontaneous spending

When putting money aside for a rainy day fund, try to set aside a little more than you can give yourself as a small reward. Think of it in terms of a diet, you may be familiar with the term “cheat day”. Often times when people stick to strict diets, they allow themselves a cheat day where they can eat whatever they want, but only for one day per month. Set aside some money each month to afford your own financial cheating day. This will give you the satisfaction of spending money and shopping without breaking the budget – because you’ve budgeted!

Hope these tips helped you create the perfect budget that will be saving you money in no time. Just have a little self-confidence and you can do it!