Budgeting 101: Here is how to create a financial plan that works for you
I remember a certain time in my life when I was just living my life on auto-pilot, taking every day as it came and making some rash decisions especially when it came to my money. I made money this day, just to spend it the next day. I have no track records and funny enough, I was
never bothered. The money kept coming in anyways.
This toxic cycle continued until I became broke one day and I realized I had no backup plan. It was like all the money vanished and there was no explanation for it. I fell and fell flat to my face. I didn’t know that money just like everything else, should be taken seriously.
Getting broke is one of the worst things that can happen to a person especially when everyone knows that you have a nice paying job because you have no excuse.
If this is you, then you are not alone. I have been there and it is not a good place to be at. As a person, you need to understand where and how your money comes and goes. You need to get your finances in order. It’s not right to sweat to make money only to spend it carelessly. This is why everyone needs a budget. This is simply a plan for managing income and expenses over a set time frame.
Everyone needs a budget plan, including students. As far as you have money coming in for you now and then, you need to create a budget plan that aligns with your kind of person and your goals.
Here are some tips you apply to create a budget that works for you and stick to it:
List and calculate all your income every month or week:
Whether you are a 9–5er, a remote worker, self-employed, or a student; you have to take note of how much money you make every month. Take note of all your streams of income — salary, your side hustle, investments, allowance from your parents, etc. Don’t leave anything out.
List your expenses:
Expenses will always come and can be random but that does not mean you should not track them. Include your fixed expenses like rent, electricity, transport, groceries, medicals, school books, etc. Also include emergency ones like car repairs, extra school dues, etc. If you need to jog your memory on how you spend your money, take a look at your bank statement.
Set your savings goal:
Saving money is good. It is necessary and not only will it come in handy when you need it, it will teach you discipline and contentment. If you have a savings goal you can use your budget to work towards it. You can also use apps that can help you save your money automatically. Always save money.
Have a spending limit:
I always advise that after settling the necessary expenses, the rest of the money you have now is for saving and spending. But, you must save first before you spend else you spend everything. It’s okay to enjoy once in a while but make sure you are not always spending
frivolously.
So there you have the four easy tips to help you make your money work for you. I know it’s not going to be easy but with consistency and dedication, you can do it. In no time, you will begin to see the benefits and wonder why you didn’t start before now.
