deepstash

Beta

© Brainstash, Inc

AboutCuratorsJobsPress Kit

No matter how little or how much money you earn, creating a monthly budget is one of the most important aspects of managing your finances. What gets measured gets managed.

Having a budget doesn't stop you from spending money the way you want it to, but works like a partner to track your spending and allocating resources to help you reach your financial goals.

@summers338

Your Complete Guide to Creating a Monthly Budget in 2020

listenmoneymatters.com

The Envelope System

The Envelope system is a way to track your variable expenses like food, entertainment, and drinks.

This method, preferably used weekly, allocates a certain amount in each category in labeled envelopes (food, drinks, movies, etc.). Once the envelope is empty, you are done spending in that category.

The principles that make a good budget, something you can stick to:

  • Being Realistic: Being too strict is a recipe for failure.
  • Making Adjustments: A budget is not set in stone, but a fluid thing.
  • A Team Sport: If you live with a partner or spouse, you have to agree mutually on how to budget the financials.
  • Expect the Unexpected: Keep an emergency fund, ideally 3-6 months of necessary expenses.
  • Budgeting the Expected: Certain upcoming expenses need to be budgeted in advance, like property tax, holiday shopping, etc.

Follow these simple steps and start Budgeting:

  • Choose the right tool (Budgeting App, Excel sheet or Envelopes)
  • Gather all information like your bank and investment account numbers, user id's, and passwords.
  • Make a list of all your income sources and all your expenses.
  • Share the important financial and budgeting details with your partner or spouse if applicable.
The 50/30/20 Rule

It breaks down your budget categories into three broad segments:

  • 50%: Essential Expenses like housing, automobile expenses, groceries, insurance, utilities, etc.
  • 30%: Discretionary Expenses (Non-essential) like Dining out, entertainment, drinks, etc.
  • 20%: Financial Goals including mortgage, home, and educational savings.

If there is heavy credit-card debt, the financial goals should be 30% and non-essential spendings only 20%.

Deepstash helps you become inspired, wiser and productive, through bite-sized ideas from the best articles, books and videos out there.

GET THE APP:

SIMILAR ARTICLES

Online Scheduling and Online Bill Payment

Scheduling your payments  (online or through your financial institution’s bill pay feature) decreases the likelihood of blowing your budget. 

Despite the fact that funds will be sitting into your account until the date they are due to be withdrawn, you’ll know the money is off limits for casual spending.

7

IDEAS

Budget for the life you have. When you’re going through your budget and assigning spending categories, be realistic. 

Don’t tell yourself you’ll never buy a single discretionary item, because you’re setting yourself up for failure. Give yourself some breathing room.

Budgets are necessary for running any business efficiently and effectively.

  • Budget Development Process. Assumptions related to projected sales, trends, cost trends, and the overall economic outlook is established for the upcoming period. The budget is then published and outlines the standards and procedures used to develop it. The master budget includes forecasts of cash inflows and outflows, budgeted financial statements, and an overall financing plan.
  • Static Vs. Flexible Budgets. A static budget remains unchanged over the life of the budget. A flexible budget has a relational value to certain variables, such as sales levels, production levels, or other economic factors.