Top Tips For Planning Your Monthly Budget

Creating a budget is the best way to keep on top of your finances. It gives you control while allowing you to continue with your spending without having to deal with that dreaded panic at the end of the month.

Budgeting is easy to set up, and simple to modify when your needs change.

1. Plan The Budget As A Team

Plan your budget with your partner, housemate, or whomever. If you share bills with someone, then create a budget with them. If you both know what the takeout allowance is, then no one will accidentally go over budget.

2. Count The Big Payments First

Now everyone is ready to look at the bills, start with the big payments first. Rent/mortgage, utilities, vehicles, and food, these are the top four things you need to write down. 

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Once you have those payments at the top of your budget list, go on to the next big payments; phone bills, loan bills, etc. 

Lastly, put down the payments you have but can cancel if necessary; netflix bill, gym bill, subscriptions, etc.

Now you have them in order of necessity, with their price.

3. Look At What’s Realistic

Now you have all your bills laid out, it’s time to compare it to your income. If you are planning with a partner or housemate, use their income too. If your bills outweigh your income, you need to cancel some of the low-level payments. These are the subscriptions that you might enjoy but don’t need.

You need to bring the bills down to an even $0. If you cannot realistically cut down the bills, then you may need to change your lifestyle. For example, you may need to downsize your living area, search for cheaper utility bills, or disconnect from the internet until your finances are back in shape.

If you know you can pay back your bills later but are short for cash now, then you can apply for a loan. For example, CreditNinja’s secured personal loans will let you take out a loan against a valuable object (like a house or a car). If you fail to pay, they may take the object, but the fact that you own it means you can pay the debt.

This type of scenario works best for people who are between jobs. If one job ends and you have signed a contract for a new one that starts in 2 months, you can use these loans to make ends meet during that 2-month dry period.

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If you do have some money left over after your bills have been paid, then you don’t have to worry about loans! 

4. What Are You Budgeting For?

At this point you can hopefully see some spare money in your account. This money can be used for your budgeting aims. You should create a savings account and put half the spare money into your savings; we will deal with the rest in part 5.

Separating your savings from your bills means you know it will not get swallowed up in the monthly madness of spending. Whatever your budgeting needs were for, you will now be able to see your progress.

That vacation, renovation, or hobby will be available sooner than you think! If you aren’t budgeting for a reason and simply want to control your money, then when you eventually want to spend on something big, the savings will be there to help you!

5. Give Yourself Wiggle Room

With the last bit of money left unclaimed, we suggest putting it into a 3rd account. This account should be entitled “Random Fun”. If you want to go to a restaurant, watch a movie, go ax throwing, you can use this unclaimed pot of money to fund it. 

Talk to your bank and ask for an account without an overdraft. That way, you know that your fun and random days out will not cost you more than you can afford.

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6. Remember Your Food

Food is one of the big payments you have to make daily, weekly, monthly, but unlike your other bills, it will change with every random coffee you buy on your way home from work and every new dish you want to make on the weekend.

There are two ways to plan for your food. The first is to give yourself a weekly shopping limit, and plan your food beforehand. This is a great choice for most people as they can plan ahead, not waste food, and keep within their budget. But some people like to have more food freedom in their lives. 

Planning their food that far ahead is a waste because they don’t know what they will want on the day. For these people, we suggest creating a 4th bank account entitled “Weekly Shop”.

This weekly shop is another pot of money that shouldn’t have an overdraft. This way, you can spend money on your food sporadically and see how much you have left each month.