Simple Guide On Effectively Budgeting Your Monthly Income

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It has always been the struggle of every person to allocate their monthly income for daily sustenance. The need to appropriate money for rent or mortgage, food, necessities, savings, etc., is already complex. Moreover, budgeting becomes even harder when you do not control your spending. 


There will be days when you will be out of money just a few days after getting your salary.  As such, you might be currently looking for ways to effectively budget your monthly income and save money. Here are some helpful tips to successfully manage your monetary allocations you might want to try.



Determine Whether Your Expenses Are Fixed Or Not

Fixed expenses are consistent expenditures that you always pay for every month, such as rent, electrical bills, insurances, and more. On the other hand, those that cover random spending are called variable expenses, based on one’s lifestyle and habits or preferences.


Oftentimes, these are the things you buy just because you want to, such as gifts and other leisure that are not needed. Once you distinguish these expenses, try focusing on the fixed allocations and tone down spending on random things.


Practice Getting Away From Impulsive Buying

Having a good spending habit every time your salary comes is crucial in maintaining a budget. Impulsive buying, however, negates your good spending habits. Every time you see an item  that you like but don’t need, restrain yourself from buying and think about it for a couple of days. Impulsive buyers give in when they feel the urge to buy what they want. 


Needs Over Wants

One effective way of having a better budgeting habit is to spend for needs over wants. It would be best to clarify what things are necessary and what is not. People think that buying new things is a need, but it is more like a want when you really think about it. “I want this; I want that” attitude is often the cause for poor budgeting.



Spending On Small Stuff Actually Covers A Huge Portion Of Your Expenses

There are times when you check on your money and realize you spent a significant sum on a lot of small stuff. It might include buying a cup of coffee, a couple of candies, a piece of donut, a can of soda, a book, etc. 


You would think that these are just a tiny portion of your expenses, but if you spend on any of these things once or twice a day simultaneously, you will definitely wonder why your budget gets tighter and tighter.


Live Within Your Means

Poor budgeting means overspending, and sometimes you would spend a considerable sum on branded things that are way over your budget. When a new phone model comes up, the urge to get your hand on it is irresistible, even if you just got your phone a year ago. 


You tend to succumb to the trend without realizing that your salary can’t cope. Some would resort to getting a loan or borrowing money one can hardly pay. Hence, you should really think twice or a million times before going overboard on spending too much. Live within your means. 


Use Cash Over Credit And Debit Cards

Having a credit card or a debit card gives you the convenience of spending more. On the other hand, having cash can limit you to what amount you have with you. Think of this as something psychological. 


Cards make you confident when you see something to spend on, while cash will make you think about what you will have left when you spend  on that expensive thing. Thus, it would definitely help your budget if you practice using cash over cards. 


Try The Infamous 50-30-20 Rule

The 50-30-20 rule allows you to divide your monthly income into three categories:

  1. 50% of your salary covers your “needs” like food, clothing, and shelter.
  2. 30% is allocated for your “wants,” allowing you to spend on your hobbies and other things you always want to have.
  3. 20% goes for your “savings,” which constitutes your emergency fund in case of emergencies.


Manage Your Debts

It is difficult not to have debts when your salary is significantly low to cover your expenses. When you provide for your family and your children go to school, it becomes more difficult allocating your monthly income effectively.


Thus, getting loans and borrowing money becomes an option. If you have these debts, you must manage them properly. Make sure to pay a debt before getting another. Better yet, if your salary is already enough to fend for you and your family, pay all your debts and stop having obligations moving forward.



Budgeting your monthly income can be tedious. However, knowing how to allocate and spend your money makes it more convenient. It also gives you peace of mind knowing that you can survive until the next salary comes.


Hence, you must have prior knowledge about your possible expenditures because knowing where your money goes lets you devise a plan.