How to create and manage your monthly budget

2 mins read

Without a well-managed budget, you will struggle to stay on top of your personal finances and might make some entirely avoidable mistakes.

To help avoid this, here are some tips to follow that will let you create and control a budget month by month with ease.

Start with a template

There is no need to try and conjure a budget into existence out of thin air; instead you should take advantage of a free Google Sheets budget template which will act as the framework on which you can build your own budget just by entering in the relevant figures.

When you begin to add the data to the spreadsheet, it makes sense to have your online banking service open so that you can refer to it and provide the most accurate, up to date figures available. This will cover everything from costs for things like housing, food and transport to the amount you are putting away for savings.

The process of filling out a budget template itself could reveal some very significant factors about your finances and spending habits which may be hampering your chances of securing improvements.

Set targets

Once you have your budget in place, it is next necessary to establish goals which you will aim to move towards going forward.

These goals may be short-term in nature, perhaps covering your saving ambitions for a vacation next year, as well as long-term, factoring in retirement savings.

Aside from letting you see how much you are putting aside, setting targets will also give you the motivation to manage your money more carefully, rather than being less cautious from month to month and potentially ending up dealing with debt for longer.

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Make changes

With a budget to hand and targets to work towards, you will need to decide whether or not you will need to alter your spending habits to tip the balance of your finances in your favor.

If it is necessary to cut back on your spending, then clearly the primary place to make savings will be on any luxuries. This might include social activities, subscription services or anything that is not a fundamental requirement of modern living.

It is also worth remembering that even if you only cut back and save a small amount each month, this will eventually make a major cumulative impact and could push you towards your goals much faster.

Update & re-evaluate regularly

Creating a budget is a brilliant start, but it will only be worthwhile if you keep using it and update the information it contains frequently.

This is especially important if your expenses change suddenly, or some other life event, such as getting a new job, has an impact on your financial situation. The quicker you can include this in your budget, the easier it will be to find a solution to any complications.

So there you have it; everyone can benefit from having a monthly budget and it will continue to pay dividends over time, so long as you use it.

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