A Tough Balancing Act

A budget helps you organize your expenditures. It itemizes how much money comes in, how much money you spend, and where the money goes. A budget can also show where some changes might be needed. It will help identify expenses that aren’t as urgent to you so you can use and free up money for the important ones.

With a balanced budget, managing your money will be easier. Set up your financial goals and make a plan to forecast your expenses. Develop the discipline and good financial maneuvering. Know your limitations and top priorities. Be focused and keep your expenses within your budget. You can make it happen! Managing your money is possible. With this, you can achieve your financial goals.

Accounting for Expenses

In order to prepare an efficient budget, you must first account your current expenses. List down all items paid for during the day, on a daily basis. A sample of which is shown above.

It’s easier if you’ll keep the receipts in a purse and jot down in your notebook or planner at the end of the day. Include all disbursements, even your personal allowance for the day. You may have some loose change to go with that, you can put that in your piggy bank, or simply placed in your coin purse for future use. It’s a tedious task to account for the minimal costs involved.

This goes on week after week after week, until the last week of the month. By the end of the month, we’ll have the full account of your expenses.

How to Prepare A Monthly Personal budget

After defining what budget is, we will now prepare your monthly budget. First of all, we will NOT prepare your budget for the current month. This will be your budget next month or the month after next. Confused?

This is the principle behind an effective and realistic budget. We must first gather receipts, list down payments to a notebook for one whole month. Then we will classify them accordingly. To make it easier to track down your expenses, you can use a planner instead of a notebook. If you can’t find one in your home, don’t buy! Just find an old notebook and label the pages per week. If you can attach the receipts, so much the better. This will be helpful in analyzing your expenses for groceries, shopping, school supplies, etc. There may be expenses incurred for the current month which may not recur the following month, like purchases of items with future use, such bath towels, pillow cases or a vase. You don’t buy these items on a monthly basis, but these are mimimal expenditures with little or nominal value in the future.

Can’t wait for another month? Okay then, if you can vividly recall all expenses last month, you may also write these down in your notebook, this time on a monthly basis, since you may not be able to recall the dates of payment but only the cost paid. Are you ready?