One of the most effective secrets to make your personal finances healthier is to organize a budget staff according to all your needs.
By doing so, it will collect all your financial information, showing all your planned expenses for a certain period of time through it, established by you.
Generally, each month a well-consolidated personal budget is made where any financial needs must be organized and updated. In the meantime. we recommend that you first get an annual budget and after that a monthly budget. In the annual budget you can have a complete vision of your financial organization, and rely on that budget to create the monthly
Collect your financial information for your personal budget
As indicated at the beginning of the article, the best thing to do is to establish the annual budget and, after that, the monthly. start writing down the income or expenses you have had in the last year. Make sure you don’t leave anything behind, ya that this step is the most important.
If you don’t know where to start, look for bank statements, card bills, or bank accounts and receipts. At this stage, we will start by distinguishing expenses from income. Don’t let anything slide, even if you think you could solve a delay outside, because it looks easy.
After organizing everything, go to step 2.
Step 2: Rate the information
This next step to build your personal budget is usually the easiest, where you must distinguish your fixed income from variable. The main difference between the two is that fixed income is usually your monthly salary. Variable income is extra income that you generally earn on your own such as when you work overtime among other situations.
In the expenses they differ in fixed or variable. Fixed expenses are those that we must make a payment each month, such as insurance, the mortgage, the rent or taxes. Variables are expenses that change every month, according to our routine, What food, electricity bills, clothes, movies, family outings, etc.
Take all the expenses and separate them in your personal budget by category, building two columns, one for actual values and one for estimated values. At the end of each month, review each amount, referring to the value of fixed expenses.
In variable expenses, take the values of the last 6 months and take their average.
Step 3: Review your current personal finances
After organizing your financial information for your personal budget, look at the numbers and ask yourself if your income covers all of your expenses.
Also ask questions, such as: do you have savings? Do you spend more money supplying which category? Can expenses exceed your income while using your credit card to help supply it? The amounts you have calculated for your expenses will help you answer these questions.
Put the blame aside. Agora You must take control of your financial situation to achieve your goals. Now set your financial goals.
Step 4: Set your personal budget financial goals
When building your personal budget, establish a specific objective and justify it, since the motivation to establish this budget is more than essential, because your objective is the engine so that you can meet your budget.
Take a few minutes to reflect on the achievements, that is, the dreams you want to realize and where you want to go with your entire financial organization.
You probably think about many things. write them down making a list of all the options, and order, first writing the option that stands out as your priority.
Now that you have written a list of your goals, segment them, respecting the time to achieve these goals, that is, it can be short term between 1 or 2 years, medium term between 2 to 5 years and long term. term, at least 5 years.
At the end of the period, you will know what to do.
Step 5: Create a financial plan tailored to you
At this point, define the path that will take you to your goals. As much as any initial situation is different, we all find ways to aim for our goals, and this is the change of habits, such as increasing your income or reducing expenses.
In both cases, we must define the exact percentage or amount in order to specify how to achieve a goal. For example, if you reduce your monthly expenses by 20% or increase your monthly income by €300.
Suppose you want to have an emergency fund for 6 months in the short term, so you would have a plan to reduce monthly expenses by up to 20%. To control your finances, you should back your personal budget to situations What analyze and rule out some variable expenses that you won’t need to keep arcane, like going to the movies all month or going out to eat.
In this way, the amount saved from your finances can be invested in your emergency fund, in addition to the amount you should currently be at.
Step 6: Help yourself with tools to follow your plan
To drink control of your expenses of one way easyuse tools to help organize your personal budget, such as Excel documents or websites and apps focused on personal finance.
Choose one of these tools, like the one you know, and start for easily managing your money, track and forecast your budget every month. You can also easily edit any information on the lanílias or documents.
now that you understand better your financial situationread the step 7 to complete this article, that is, learn how to perform and verify, and take care of your financial situation.
Step 7: Run and check
You have already set up your personal budget so far. Now commit to your entire financial plan and stick to your budget to change and better control your finances.
For this, the essential thing is that you analyze the budget, not to see how much you spend on each debt, but to achieve goals managing your personal finances.
That way, you will be able to see more clearly if you are going in the right direction or not. At some point the answer was negative, you can correct the error with the help of financial tools. That way, you will be getting closer to reaching your goals. and reap the best fruits.
After reviewing your personal budget at the end of the deadline, pay attention to certain points, such as:
- Did you have any unforeseen circumstances, or were properly?
- Have you reached the economy you expected?
- Were the expenses created by the quality category increased or decreased? Fix the raise next month if it’s unnecessary;
- Consider all the information from this month’s personal budget and write it down, defining what changes you want to make in the next plan.
Soon, you can now configure your budget staff to improve your finances and achieve your goals. Please share this article with your friends, spreading the news that they can build a personal financial budget efficiently, no more than having unnecessary expenses. Thank you and see you soon.
