intelligent and multiple means of income, but also savvy financial goals, and personal budget to help you plan and monitor your monthly expenditure.

“A personal or household budget is an itemized summary of expected income and expenses for a defined period of time, most frequently one month.” – The Balance

This post will give you a step-to-step guide on how to make a budget that keeps your finances constantly in check.

How To Prepare A Personal Budget

Document all sources of income

To get started, you should have an accurate list of the different sources where you make a living and how much you make from each source every month. If you are self-employed or have other outside sources of income apart from a nine-to-five job be sure to record these as well. However, make sure you do not make presumptions of uncertain and unsteady sources of income, that may dissapoint. Your budget should be based on money that is guaranteed.

Make a list of  monthly expenses

Your list should contain all the things you essentially spend money on in the course of the month. This list should include two categories: fixed and variable. Your fixed expenses remain the same from month to month, like your house rent, work transportation costs, bills,etc. Variable expenses are likely to fluctuate depending on unprecedented circumstances during the month. These expenses include eating out, going to the movies or giving a birthday gift to a friend.

Compare Income and Expenses

When your list is completed, do a total of your income and you expenses. Compare the figure of both lists together. It is important that you do not spend more than you earn. Your expenditure should cover at most only 70% of your income. If your comparison shows that your expenses is on the excess then it’s time to make adjustments to your spending habits. These adjustments should be incorporated into your budget.

Plan/Adjust Your Expenses

With the list of things you spend on monthly, it is time to review your current expenditure and decide what areas need adjustments. Do you spend unnecessarily too much eating out or on trivial entertainment? Cultivate new habits that can help you cut down on excessive spending. Make effort to discover spending alternatives that are more economic, for example instead of taking a cab to work everyday, you can try taking the bus. With adjustments made, then make wise allocations to each item of expenditure like feeding, weekly transportation, wardrobe allowance, etc. However, in order to maintain the comfortable lifestyle you love, be wise enough to pick up other income opportunities and start making more money.

Save Excess and Set Financial Goals

It is advisable to have 30% of your income as excess after the month’s expenditure. Having excess means you can save towards important financial goals. For example, starting a business or taking a professional course.

Budgeting Apps and Saving Money Apps

Technology has made everything easier and automated. There are many useful apps that can help you track your spending and automate deduct a monthly allocation of your expenses as savings. Piggy Bank Cowry Wise Kolo Pay Mint Find Reach   Finally, ensure you, keep to you budgect and you review it regularly and make new adjustments that you find necessary.]]>