Business Desk – Budgeting is one of the main steps when it comes to managing finances. It makes it easier to afford all of your expenses. But it needs to be done practically on the basis of your income, expenses, and savings.
With the help of a monthly budget, you can build an emergency fund and can save more. Here know how you can create a practical monthly home budget.
- Create a monthly home budget on the basis of your income. If you have more than one income source such as rental income or investment returns include it.
- List all of your monthly expenses such as food, transportation, and any others. Don’t miss any of your expenses.
- When you create a list of your monthly expenses then categorize them into fixed expenses and variable expenses. Don’t miss to include your discretionary spending such as dining out and other non-essential expenses.
- Review your expenses carefully and set a limit. In case, it becomes higher than your income, make adjustments. You can cut down your non-essential expenses.
- Remember to review and adjust your budget regularly. It will help you to track your expenses and saving.
You can also try this trick 50:30:20 which Means, 50% is to be spent on needs, 30% on the wants like travel, car, etc., and 20% on savings.