How to figure out a budget

 How to figure out a budget



A budget can simply be an estimate of the money you earn and spend. It represents the financial situation without much complications. Figuring out ones budget is simple, all you need to do is keep a track of the needs and wants and your savings.



When’s person earns £2000 a month, he/she needs to keep a track of the money that’s being paid for the housing, food, insurance, savings and dept repayment. That’s where a budget comes into play. It basically helps the person to categorise and figure out how to efficiently process with their money. 


Keep track of your after-tax income, the automatic deductions from your savings and the health and life care insurances. This can provide you with a clear understanding of how much money is being deducted automatically from your savings. You can also record your spending and savings using many online budgeting and savings tools and apps. 


So there’s a very simple method to track and figure out a persons monthly budget.

> Start with a financial self assessment and track your monthly income and monitor the progress. 

> Use the simple budgeting technique, 50/30/20 rule. 

> Keep 50% of your income for your needs.

> Keep 30% of your income for your wants.

> Keep 20% of your income for savings and dept repayments. 


You can also use this 50/30/20 budget plan to maximise your money. This plan only lets you spend 50% of your income on necessities and 30% on your wants and 20% goes into savings and dept repayments no matter what. This plan will keep you aligned with a proper and healthy way to budget and save your money efficiently.


Your needs:

> Groceries 

> Housing

> Basic Utilities

> Transportation 

>a Insurance wo

By efficiently keeping track of all the above mentioned factors, one can easily create and manage their budget effectively. The 50/30/20 rule plays a major part in figuring out a persons budget and savings. Every budget also needs to be altered from person to person, if you want to get out of dept as fast as possible you may decide to cut down on your wants and improve on your savings and dept repayments.


Your budget is a tool to help you manage money efficiently. It can never be a barrier to keep you enjoying your hard earned money. If there’s no fun, you will less likely to stick with your budget plan. And a good budget is always the one you will stick with.


-Naveen

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