Sometimes, it is difficult to keep track of all your expenses and trying to save some of your salary every month. Unplanned spending from unexpected events or desires can lead to you the picture scenario above.
Here are some simple ways you can plan your budget so you have enough throughout the month till your next pay cheque and even have some left to save if you’re up for it!
The 50/30/20 Method
This method is good for those who have a fixed salary but isn’t able to set aside money to save, but would love to kick start a habit of saving part of their income every month.
Set aside 50% of your salary on basic month expenses such as utility bills, phone bills, rent, food. This is something that will be incurred without fail every month so it would take up half of your salary in total.
30% of your salary would be on less important but necessary things. Thing such as entertainment (TV subscription expenses), clothes etc can be splurged on, but at only 30% of your total salary. This would not deprive you of some shopping time or that you will have to stop watching your favourite channels.
The last 20% would be savings for a raining day. This is good for unforeseen expenses so that you would not end up borrowing from friends every time you have insufficient funds to last till the next pay cheque comes.
The “Simple” Method
This method is for those who don’t want to strictly limit themselves. It’s simply just dividing your budget into 2 parts: permanent expenses and others.
Permanent expenses are the expenses which will be incurred on essentials such as food, rent, utility bills etc.
Others would be items that you could live without. Key word being could so it’s not essential. Items such as meals at restaurants, cafes and movie night is some example of items in this category.
The “Basic Budget” Method
This method is for those without a fixed income and those who want to save. Work out your minimum month budget and calculate how much you spend on essentials, examples are rental, food, petrol, utility, mobile plan subscription.
The extra money you get that month can go towards long term aims such as a good meal at a restaurant, or a present for yourself.
The “Weekly Allowance” Method
This method is great for those who consistently run out of money several days before pay day. I am guilty of this and personally, this method has helped me a lot.
Calculate how much of your monthly budget you wish to spend and how much you want to save. Then divide the portion of the money you wish to spend into 4 envelopes – one for each week of the month (some month we have 5 weeks, so there should be 5 envelopes for those months).
This way, you should tell yourself that you can only spend the amount in the envelope for that week. If there is extra money left from that week, you can choose to bring it forward to the next month or put it into savings. This way, you can treat yourself something the next week with the extra money from previous or you have more savings.
Featured image: Shutterstock / Venomous Vector
This article was first published on goodyfeed.com
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