How to Budget Your Money on a Low Income
A budget is a quantitative plan for all the expenses and incomes related to a particular time period. It is formally used by corporations to plan their sales and revenues, assets, liabilities, cash flows and other costs. A budget is very important in government planning and implementation.
It can also be prepared by individuals who intend to plan for their household expenses in profound way. It doesn’t only help in assessing future expenditures and incomes, but also provide great help in controlling the expenses which eventually assist in saving more money. It is extremely helpful for individuals that have a low income.
Instructions
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1
Make a list of your debts
First of all, you have to prepare a list of all you debts. These debts will include all the loans which you have taken from the bank. Moreover, it will also include any other borrowing which you have taken from your friends or family members and have to pay back in the near future. Don’t forget to mention the time at which your debt will be due. -
2
Make an account of all the utility bills
Utility bills are included in one of the most important expenses. Therefore, it is very important for you to make an account of all your utility bills which you have to pay at the end of the month. In addition, if there are any arrears, you must note them down as well. -
3
Note down other expenses
After noting down the amount of utility bills, you have to take into account all the other necessary expenses which you will incur during the month. These expenses will mainly include your groceries, petrol/gas for vehicle and clothes. Additionally, if you read a daily newspaper of any weekly or monthly magazine, you must also include their respective expenses in the list. -
4
Do the essential calculations
It is the most important step in preparing the budget as you will make all the necessary calculations regarding your expenses for the month or the time period for which you are preparing the budget. Include the expenses of all the necessary items and try to minimise the expense of all the other things. For instance, spending money on food items is important, but you don’t have to buy clothes every month. -
5
Keep room for emergency expenses
You must keep some money in a separate head in your budget which you can use for emergency purposes like medical treatment or paying off traffic penalties.
