How to make a personal budget for a month or a year? - GovtVacancy.Net

How to make a personal budget for a month or a year?

Maintaining a personal budget may seem complicated and incomprehensible, but in reality, everything is much simpler. This approach has many more advantages than disadvantages: it encourages a responsible attitude towards finances, and it allows you to save and save money without spending money on unnecessary expenses. We will inform you in order about the calculation of your personal budget for a month and longer periods.

Planning and goal setting

Each person has their own style and lifestyle, so everything depends solely on your needs. Set goals: they can be short-term, achievable in a month, medium-term (they can last several months) and long-term, a year or more. The goal may be to buy something, save a certain amount, or reach a certain level of income.

Personal budget for the month

If you want to calculate and plan finances, but are still not confident in your abilities, you can start by drawing up a personal budget for the month. Specialized apps will help with this, for example, Zen Money or Mobills Budget Planner, or even Tinkoff Table. It is convenient to set daily spending limits on them, adjust their parameters, and also prescribe various spending items. To make it easier, let's break your actions down into steps:

• Write down your sources of monthly income and calculate the amount that is collected per month
• Identify the expense items and determine the approximate budget for each of them
• Set a daily spending limit
• Try to follow the plan

Mandatory Items

Expenditure items are mandatory and optional, as well as permanent, periodic, and emergency. Its distribution can vary according to lifestyle; over time, you will be able to choose a comfortable format. But you have to prioritize some expenses because they are essential:

• Utility costs (housing) or rent
• Payments of financial obligations, if any
• Set aside a certain amount in a savings account if you are saving for something or trying to build a pocket of air. It is best to try to do this regularly
• Household expenses: food, transportation, children's education.

Optional Items

 These include purchases and expenses that you can do without going to restaurants and the movies, and small but pleasant purchases. If the budget allows, optional expenses should not be completely abandoned, but their priority should be lower than that of mandatory ones. It is believed that the monthly personal budget should be distributed in this way:

• 50% should go to priority and mandatory items
• 30% - for non-permanent and optional
• 20% is better to send to a savings account.

Daily limit

It is very important to account for all expenses and try to stick to the daily spending limit. Thanks to this approach, you can save on optional items and allocate finances more efficiently. If something doesn't fit the daily norm and isn't a priority (for example, buying groceries or paying off a loan), don't buy it. This will make it easier for you to save money and you will not find yourself in a situation where the finances go to no one.

Personal budget for the year

Here are some tips to keep in mind as you create your personal budget for the year.

° Consider the goals:  Let's say you have some medium or long-term goal that you plan to achieve in a certain period. It is important to calculate in advance what actions you will need to take for this, determine their volume and regularity. For example, you decide to buy a computer that is worth around 50 thousand. To achieve this goal in six months, you will need to save a little more than 8,330 euros each month.

° We celebrate key milestones: In some months we spend more than in others due to some seasonal event: holidays, the beginning of the school year for children, family vacations or the launch of new technologies. Financial education teaches you to think about the future: try to predict events in advance.

° Correct deviations: If on one of the days the limit was not met, the following day it must be reduced. Even the simplest apps do it automatically, so you don't have to calculate anything manually. The same criterion can be extrapolated to the annual budget: if in any of the months you spent more than expected, then it is better to save money in the following one.

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