Categories: News

Personal Budget – 7 Guidelines That Will Help You Plan a Working Budget

Setting up your personal budget requires a hands-on approach. The following guidelines will help you plan a working budget to undertake this journey.

1. Gather all your financial details. That will include all of your bank accounts, credit cards and insurances papers – anything to do with your personal finances. These details will be needed to start your budget.

2. List all sources of income. This includes salary, rental income and regular dividends and interest.

3. Categorise your expenses starting with your commitments – list each item under headings such as:

  • Home: mortgage or rent.
  • Association and professional fees.
  • Insurance: health, motor vehicle, home, contents and life
  • Education costs
  • Day care and child care
  • Loans: car loan, student loan, bank fees and interest
  • Land tax or rates.
  • Other payments required as a commitment: motor vehicle licensing.
  • Investment – yes commit to your future and pay yourself!

4. List necessities – again list each item under headings:

  • Food, groceries, gas (petrol), home maintenance, security.
  • Utilities: gas, water, electricity, rubbish disposal, phone costs
  • School lunches, household supplies, car maintenance, internet service, dry cleaning, monthly parking.

5. Other expenses. Personal everyday expenses covering: lunch at work, snacks, coffee, drinks, newspapers, magazines, batteries, postage. Family and personal allowances: parties, entertainment, weekend outings, movies, concerts, other entertainment and events, home improvements and decorating, magazine and other subscriptions, dining out and fast food. Also include: clothing, hobbies, personal recreation, books, CD’s, manicures, hair care, alterations, shoe repair, personal and family gifts, gardening, film processing, video rentals, sports and gym, donations, computer software and other related items.

6. Once you have all your expenses listed add the total expenses and deduct these from your income. You will need to convert everything to monthly or weekly. This means that bills that are paid once a year must be divided by 12 to get the monthly figure. Convert quarterly payments to an annual figure then convert this to monthly. It is important that you include bills that are paid other than monthly to ensure that the money is available when the bill is due. Place the money in an interest bearing account.

7. Do you need to tweak your budget? When you deducted the expenses from your income was there any money left or did you find your expenses were more than your income? If your situation is the latter you will need to do some tweaking. The commitments cannot change. As for necessities you may be able to cut down on food expenses and find cheaper providers of utilities or try to save costs by being conscious of switching off lights etc. But it is the other expenses category that has the most capacity for tweaking as many of them are not needed and can be reduced or cut out. Review your budget regularly to make sure it is still working for you.

The time to start a personal budget is now and these guidelines are designed to make sure that your budget is truly a working budget — one that works for you!

techfeatured

Recent Posts

The Benefits of Partnering with an IT-Managed Service Provider for Your Business

Table of Contents Introduction to IT Managed Service Providers Why Outsource IT Management? Cost-Effective Solutions…

3 months ago

Choosing the Right Thresholds for Your Home: A Comprehensive Guide

Key Takeaways: The importance of selecting the correct thresholds for different areas in your home…

4 months ago

Innovative Railing Gate Solutions for Modern Homes

Key Takeaways: The variety of railing gate designs can significantly enhance the aesthetic appeal of…

4 months ago

How To Choose the Perfect Vehicle for Extended Commutes

For many, commuting is an unavoidable part of daily life. But when that commute extends…

4 months ago

The Future of Mobility: Innovations in Automotive Technology

When you're on the road, you want to feel safe, comfortable, and like you have…

5 months ago

Clean Air Starts at Home: Tips for Maintaining Indoor Air Quality

Key Takeaways: Understanding the significance of indoor air quality. Identifying common pollutants in your home.…

6 months ago