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Five Simple Steps To Develop Your Monthly Budget

To truly control your personal finances, one of the first things you need to master is your monthly budget. Configuring a monthly budget can be deceivingly hard, as it forces you to consider every last penny coming in and out of your pocket. Below are five simple steps to help you develop a monthly budget that really covers everything.

Analyze your family’s eating habits and develop a weekly grocery shopping allowance based off of it. Grocery shopping can be a budget buster if you aren’t careful with how you shop. Every aisle is filled with ‘can’t miss’ sales, to the point where you may start thinking you are really saving money by buying all the discounted products you can see. Don’t get sucked in by store promotions.

Instead of sales, watch how your family really eats over the course of a week. Come up with a realistic budget for groceries every month. Never go over the allotted amount. It may mean that you need to shop with a calculator in hand, but you are better off with that than being over budget by a few hundred dollars monthly.

Develop a realistic budget for food on-the-go or night’s out. You may be surprised by the amount of money spent when you are out and about with a cup of coffee here and a little snack there. The prices may seem tiny, but if it is a daily occurrence, you could be talking $100 or even more at the end of each month. You need to budget for these food incidentals to get a proper idea of your real spending. As well, budget for planned night’s out, including dinners and entertainment. Don’t ignore this money simply because it is for fun activities. It needs to be budgeted and controlled to get a proper handle on your personal finances.

Map out your monthly driving, and create a realistic, but flexible gasoline allowance. Many people don’t have a real concept of the amount of miles they drive, so money spent on gasoline can come as a real shock when they first see the figures. It’s important to get a handle on this spend, but be ready to be very flexible with the bottom line number. Gasoline prices, as you know, can fluxuate wildly. One day it can be $2.50 and three months later it is $4.00, meaning your spend could double without you really accounting for it. Always keep an eye on this budget line and adjust according to current prices.

Account for every single bill you may pay. More often than not, you’ll remember to account for your big bills like electricity and cable. But don’t forget the smaller bills. Do you have any monthly subscription payments? Do you subscribe to magazines that are billed annually? Do you pay dues for any club you may belong to? Factor these in to get a real sense of your budget.

Add a miscellaneous line to your budget to account for forgotten expenses or unforeseen circumstances. Doing this can protect you from busting your budget. Think of it like overdraft protection, but be careful not to rely on it. It is there to act as a buffer when needed, not to spend every month.

When you follow these five steps, you will quickly get your budget more in line than it has ever been. Soon you will feel a sense of relief as you now control your money, instead of the other way around.

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