If you are reading this, you’re most likely searching for a way to take control of your finances. The best way to do this is to produce a monthly budget and committing to it. A sound budget is a fundamental tool for managing money, one that has allowed me to get on with my day to day life even on limited funds. Managing my monthly budget is one of the most crucial things I do every month, this has allowed me to consistently meet all expenditures, grow my savings, and eliminate debt.

I normally organise my budget for the upcoming month close to the end of the month. That gives me a heads up about what’s down the road. It’s not a good idea to produce a budget after getting paid because, too often, that flush feeling of getting a paycheck results to uneccessary and impulsive spending before the paycheck ever reaches the bank.

Managing my personal budget involves listing all the things that must be paid that month like mortgage/rent, utilities, and other necessities like insurance, auto loan repayment, transportation costs, and phone. These are the critical things that I must pay to keep a comfortable roof over my head. I like to pad these essentials to make “money back” after paying the bills and, if costs increase circumstantially, I’m always covered.

Next, my budget is subjected to a list of discretionary things I need to cover but could live without if absolutely unavoidable. For example, donations, credit card repayments and monthly sving deposits. Don’t get me wrong, some of these things are also necessary, but in case of emergency they can be excepted. By giving credit card companies the maximum instead of the minimum, I keep my credit score high and my debt low.

My budget will not include the cost of food, clothing, or entertainment. Ultimately, these items get covered by what’s left in the budget. Some months involve lots of beans and rice, slow-cooker meals, free or cheap entertainment, and only one inexpensive piece of clothing . This strategy of overseeing my monthly budget has worked out very well over the long term as long as I observe it conscientiously.