Personal Budget? 10 practical ways to go about it

Personal Budget

Like discussed in our last post, one of the 5 very basics of financial planning is budget. At its simplest, a personal budget lists how much income you have coming in compared to what’s going out each month.

Here we are going to discuss budget comprehensively.

So, how can a personal budget help?

A personal budget gives an action plan and clear picture of where your money is going each month. Budgeting will assist you to achieve the goals you are working hard toward—whether it’s getting out of debt, saving for retirement, buying a house or car, vacation or just trying to keep your grocery bill from getting out of hand.

Ready to get started? Here is how we do it

1.      Budget well in advance before the month begins

This means before the month even starts, you’re making a plan and giving every rupee a name.

2. If married, budget together

If you’re married, sit down once a month and have a family budgeting night. You can also make it a fun night! Grab some of your favorite snacks to help you focus.

You both need to be on the same page with regards to money. Always remember; if the two of you are one, your bank accounts should be one too!

3. Every month is usually different

Some months you’ll have to budget for things like back-to-school supplies, school fees or routine car maintenance. Other months you’ll be saving for things like vacations, birthdays. Regardless of the occasion, make sure you prepare for those expenses in the budget. Be sure to adjust your budget each month as things change. Make a savings fund in which you can stash cash throughout the year.

4. Start with the most important and basic categories first

That is food, shelter, utilities, basic clothing and transportation. Once your basics necessities are taken care of, you can fill in the rest of the categories in your budget according to priorities.

5. Pay off your debt

If you have debt, paying it off should be a top priority.

6. Don’t be afraid to trim the budget

If things are tight, you can save money quickly by cancelling your cable, dining out less, and shopping at discount clothing and grocery stores.

7. Create a buffer in your budget

Put a small amount of money aside for unexpected expenses throughout the month. Label this as your miscellaneous category in your budget. Keep track of expenses that frequently end up in this category. Eventually, you may even have to promote them to a permanent spot in your budget.

8. Discard your credit cards

If you really want to stick to a budget and get out of debt, you will seriously need to ditch those credit cards for good. Just stop using them!

Having no credit card debt will mean no more minimum payments and zero hassle with fees or high interest rates.

9. Try Using Cash to Keep Spending Under Control

If you want to strictly adhere, there is one trick to help keep your daily spending under control. That is to use cash instead of your credit or debit cards. It may not be as fast, but it helps you realize just how much money you’re spending.

10. Automate Your Savings Plan

Sometimes, remembering to save can be a struggle. Automating your savings is an easy way to stay on track with your savings plan. Schedule automatic transfers from your checking account to your savings to build your emergency fund, retirement account, children’s education. Automating deposits into different accounts ensures that you’re saving instead of spending and over time, the power of compound interest can help your money grow steadily.

Personal Budget

How do you create a personal budget?

Once you’ve gone through these steps, monitor your progress for a few months. You can do this by tracking everything you spend consistently in a notebook, a budget planner, an expense tracker, budgeting apps or online software to review the spending.

Focus on ensuring that every rupee is accounted for by dividing your expenses into categories. Fine-tune and adjust the spending as needed after each month.

How to budget when you have inconsistent Income ?

You can easily budget with an inconsistent or irregular income.

A good rule of thumb is to budget based on what a low earning month would look like. This should be your budgeting income.

What you need to do is make a list of all the things you would put in a normal budget and prioritize yourself accordingly. Be sure to take care of the necessities first. And then accordingly budget. This way when you do get paid, you know exactly where your money is going.

How Overspending Breaks Your Budget ?

The main reason to create a budget is to keep your finances under control; by keeping a track of how much money you are spending and where.

When you begin to stray from your budget, it’s usually because of spending too much money somewhere.

There are a number of reasons we overspend, so if you understand what is causing overspending, you can stop it and keep your budget on track.


A budget isn’t a constraint to keep you away from your money. Rather, it’s a tool you use to make sure your future is better—and yes, richer, than your present.

Make drawing budget a priority and see how it lays the foundation for a better future and a better you.

Do you maintain a budget ? daily, weekly or monthly ? do maintain a budget and share it with us ?

Take care.




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