Monthly budgeting can be stressful and time-consuming. Since the start of the COVID-19 pandemic, managing monthly funds is even more important for many, as budgets have become tighter, and the economy less predictable. With this in mind, it’s important to have a clear plan each month when you sit down to balance your books.
Here are five simple ways to get your finances organized and create a simple monthly budgeting routine.
#1 Know the Ins and Outs of Your Budget
To get started with budgeting, you have to get acquainted with your cash flow each month. How much money are you spending on essential items? How much are you making each month? These may seem like obvious questions, but understanding your income and expenses is crucial to managing your finances.
Important basic expenses include:
- Housing – Figure out how much you are spending on rent or a mortgage each month. What percentage of your income does this expense represent? To reduce the staggering cost of housing, check out co-living options with companies like Bungalow or Common.
- Groceries – Do you have a solid weekly grocery budget? Consider if you are spending too much on “luxury” grocery items.
- Bills and Utilities – Take into account all utility bills like electricity and gas, as well as expenses like Wi-Fi and phone payments.
Of course, there are many other facets of your monthly spending to consider, but once you understand how to budget for your basic needs, the rest will fall into place. For those who prefer to write their budgets down, invest in a charming budget planner.
#2 Save A Little Each Month
Designating any portion of your income to savings sets you up for financial security. Having a financial cushion can be extremely important when unexpected circumstances arise, like medical bills or a change in employment. Adopt simple ways to save money into your routine, like organizing shopping lists and avoiding frivolous purchases.
Additionally, it’s never too early to save for retirement! When it’s finally time to enter retired life and leave your career behind, you don’t want to be stressed about money. Incorporating retirement savings into your financial routine is as easy as setting up an automatic deposit into your savings account each month. Budgeting apps can be a helpful way to instantly view your account balance, so you always know where your funds are allocated.
#3 Work with a Financial Planner
Sometimes managing finances by yourself can be overwhelming. For those who want more support and assistance, working with a financial planner allows you to take control of your budget with the input of a professional. In particular, financial planners shed light on the big picture.
Financial planners can help you focus on:
- Financial Goals
- Business Expenses
If you want to get a move on and consult a professional now, check out resources like Cetera, which help you find the experts you need to oversee all aspects of your financial well-being.
Investing might feel out of reach for many, but allocating a little money to worthy investments can have huge benefits in the future. There’s no need to jump into investing with a huge sum of money—take it slow and don’t feel pressured to commit a large portion of your income. Investing on a budget is easier than you might think.
This is another area where accepting advice from a professional is a great way to get started. Plan out how much money you’d like to place in investments and search for companies that have a good history with investors.
#5: Set Aside Some Money for Fun
Of course, financial responsibility is crucial for managing your monthly spending. However, financial responsibility includes setting aside some money to spend on life’s pleasures! Part of a balanced monthly budget includes money for take-out, movie rentals, or some new summer clothes.
Setting aside money for fun activities or traveling is a great way to focus on your financial goals. Whether you drop your spare change into a piggy bank, or have a separate savings account for vacations, allocating money for the sole purpose of personal enjoyment removes any guilt from dipping into your primary savings account.
Find the Right Fit
Above all, managing your monthly budget should cater to your goals and values. There is no “right way” to spend money, and budgeting should provide a structure in which you can thrive.
Understanding your expenses and income and creating a sustainable saving routine will help you achieve your monetary goals. Whether you aim to increase investment earnings, save for retirement, or finally take that dream vacation, your monthly budget should support your financial plans for the future.