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Someone asked me a very interesting question yesterday, she inquired to know how budgeting can be done effectively, according to her, whenever she receives her monthly pay, she just spends on impulse till she is dried off, it has become a huge problem for her, so she decided to make a budget this month, but still don't know how to go about it.

I smiled because I knew the next financial topic to write on. A lot of us might have been deciding to make a budget, but don't know how to start, or even if you've been making a budget before, stay tuned, there is always something new and refreshing to learn and even contribute your quota.

BUDGETING simply means taking charge of your finances, being in control and setting up a plan that shows how your money flows in and out, and also setting responsible goals for your finances.

STEPS TO CREATING A BUDGET

Before the steps, you have to determine the method you want to use in laying out your budget, it could be the traditional paper and pen way or using an online budget app, whichever works for you. Now onto the step;

1 Determine Your total income

Since any financial goal has to rely on your income, it is best to determine first your total earnings in a month, if you have more than one source of income or side hustles, write out your total earning from each of them in a month and add them all up.

2 Determine your total expenses in a month

If you make use of transfers for your spending most time, print out your statement of account and make a list of things you spend on in a month, draft them out, and write out the standby basic needs first, that is things that are in place, you can't do without spending on them like the electricity bills, groceries, school fee, taxes, monthly prescriptions, etc.
After determining these monthly basic expenses, subtract them from your income.

3 List more expenses and make sacrifices

There are still some expenses we make which are not our basic needs, we could classify them as wants, list them out, and see where we can make the needed adjustment, also sacrificing some lifestyles that make you spend more, like cooking your meals at home instead of eating out all the time, it saves cost more, what you are doing now is planning your spending ahead. When you have made enough adjustments, subtract it from what you have left of the income.

4 Set out automated savings

After cutting your expenses, from what you have left, set it aside for savings, saving fir a goal is one of the best forms of saving, it helps keep our spending habits in check. Also, remember to set out some savings as a form of an emergency fund, for future purposes.

5 Always refresh your budget monthly

As we know, change is constant, and every month may come with an increase in pay or expenses, which means our income and expenses may fluctuate at most every month, always remember to review your budget every new month.

CONCLUSION

The benefits of creating a budget are so huge, from being in control over your spending, and not wondering about where all your money went at all times, also accomplishing your set out goals makes you feel fulfilled and in control.

Thank you for reading❤❤