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How To Make A Budget Plan On Afixed Income by Hardheolar(m): 8:25am On Oct 23, 2014 |
How to Make a Budget Plan to Save Money on a Fixed Income 1. Determine your overall monthly income-: If you are earn a fixed salary, then you are certain about how much you take home each week or month. But if you are a freelancer or independent contractor whose monthly income varies, you should try to figure out how much you earn on the average. Knowing how much you earn per month is the first step towards creating a workable budget. However, you must bear in mind that your monthly income is what you are left with after you have remitted your due tax. So, don’t factor in your tax dues into a your overall income. 2. Understand how you spend money-: Your next and perhaps the most important steps towards setting up a budget is to list every bill that you pay monthly as well as your minimum payments to things like credit cards. Think about how you spend your money each month. What are the monthly bills you have to pay? What are your extraneous expenses that are not really necessary ? Looking at where your money is going can help you control your expenses better. Pick up a pen and paper. List all the things you spend your money on. Then break down your expenses into categories, such as home, auto, food, utilities, health, savings, and so on. If you owe some debts, you should make a separate list of the total amount you owe each creditor. If necessary, you may need to call your creditors to confirm exactly how much you owe them. Calculate your total monthly payments to know how much you will set aside for them each month. Remember, this is the time to be completely honest with yourself. Never lowball your expenses nor inflate them. 3. Add in extra payments-: To the total you have calculated in the first step, add the amount you spend on gas for your vehicles, groceries, clothes, and anything else you spend money on each month, such as newspapers, cigarettes ( yes, you need to add it if you smoke), and wine bottles. To get a clear picture of these additional expenses, you may want to keep your receipts for a week or two. Don’t forget that you will need some pocket money for emergency payments. Total your extras together with your monthly payments. 4. Compare your spending to your monthly income-: After listing your monthly spending, compare your calculated total expenses with your total income. If what you get after subtracting your expenses from your earnings is a negative number, that means you are living beyond your means—and you need to reduce your spending until it equals or becomes less than your income. Spending more than you earn is the worst financial mistake you can ever make, and it can confine you in the quicksand of debt for life. If your total expenses exceed your income, you need to check your list of expenses to find areas you can cut down on. For example, you can stop buying newspapers and start reading the news online using your phone, instead. Similarly, if you are a chain smoker, you can reduce the number of sticks you take per day ( aside that this will help you save money, it will also improve your health ). You might be paying too much for auto insurance, in which case you need to look around for a cheaper policy. As you note areas where you can cut costs, keep subtracting your total expenses from your income until you get some left over. If you still can’t make this happen, probably because you can find any unnecessary payment in your list, you might need to increase your income by taking another job. 5. Set your budget and financial goals-: By creating a budget, you should have some goals in mind, both short-term and long-term. Setting goals and working towards achieving them helps you stay on track with your budget. Examples of short-term goals include saving a certain percentage of your income every month. Examples of long-term goals include paying off a huge debt or being able to put down a mortgage payment on a home or car. Short-term goals are easier to reach than long-term goals, but they are usually a build-up to the long-term goals. If you are unable to achieve your short-term goals, chances are you won’t be able to achieve the long-term ones. 6. Analyze your spending for importance and necessity-: With your short-term and long-term goals in mind, go through your list of expenses once again to see if your total expenses can allow you to achieve your goals. If you cannot achieve your goals without reducing your expenses, then you need to cut down on those spending that are not absolutely essential. If a significant amount of your money is going into things that are not necessary, you will need to cut down on those. In short, you will most likely need to make necessary changes to your spending habits in order to achieve your goals. 7. Restructure your budget-: After eliminating unnecessary spending from your budget, rewrite and review what you are left with. This will help you ensure that you have not left out anything important. Don’t forget to include unforeseen spending in your budget, such as the cost of repairing your car after you suddenly landed into a ditch or the cost of fixing your smartphone screen that smashed after the device slipped off your hand. 8. Stick with your budget-: The only way to make your budget useful is to implement it to the letter. Don’t be tempted into spending over your monthly budget, as that’s a sure recipe for failure to achieve your short- and long-term goals. Creating a budget is easy, but sticking with it is difficult. If you can successfully stick with your budget, then you will be able to achieve your financial goals. 18 Likes 6 Shares |
Re: How To Make A Budget Plan On Afixed Income by Dlionsheart: 8:49am On Oct 23, 2014 |
Beautiful write up. @op, thank you. 2 Likes |
Re: How To Make A Budget Plan On Afixed Income by docchuks(m): 9:52am On Aug 30, 2015 |
Budgetary control: A control technique whereby actual results are compared with budgets. Any differences (variances) are made the responsibility of key individuals who can either exercise control action or revise the original budgets http://www.fao.org/docrep/w4343e/w4343e05.htm |
Re: How To Make A Budget Plan On Afixed Income by Keysben: 7:58am On Apr 01, 2017 |
Pls i really need more help with dis topic. I will be grateful if u assist. |
Re: How To Make A Budget Plan On Afixed Income by smartty68(m): 7:16am On Apr 03, 2017 |
Insightful OP. Gracias |
Re: How To Make A Budget Plan On Afixed Income by Nobody: 7:16am On Apr 03, 2017 |
Re: How To Make A Budget Plan On Afixed Income by edidiongmichael(m): 7:19am On Apr 03, 2017 |
Sit up!
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Re: How To Make A Budget Plan On Afixed Income by Nobody: 7:19am On Apr 03, 2017 |
Good one |
Re: How To Make A Budget Plan On Afixed Income by phetto(m): 7:19am On Apr 03, 2017 |
Put am for bet9ja |
Re: How To Make A Budget Plan On Afixed Income by Celestyn8213: 7:20am On Apr 03, 2017 |
Ok I don hear u... Thank you |
Re: How To Make A Budget Plan On Afixed Income by oluseyiforjesus(m): 7:20am On Apr 03, 2017 |
I find it difficult to read Long stories nowadays |
Re: How To Make A Budget Plan On Afixed Income by alfredo4u(m): 7:20am On Apr 03, 2017 |
What about unforeseen expenses? 2 Likes |
Re: How To Make A Budget Plan On Afixed Income by SNOWCREAM(m): 7:20am On Apr 03, 2017 |
Try our National Assembly, they make the best padded budget |
Re: How To Make A Budget Plan On Afixed Income by Ezedon(m): 7:22am On Apr 03, 2017 |
What if your geflend missed her period |
Re: How To Make A Budget Plan On Afixed Income by Nobody: 7:30am On Apr 03, 2017 |
To the OP A big and grateful thank you for this post. You are one of the people that make Nairaland worth reading Thanks. 1 Like |
Re: How To Make A Budget Plan On Afixed Income by tiswell(m): 7:55am On Apr 03, 2017 |
Is this also meant for a 18k salary earner? |
Re: How To Make A Budget Plan On Afixed Income by seguno2: 7:58am On Apr 03, 2017 |
SNOWCREAM: .....and the execuTHIEVES who budget N100 for kitchen utensils every year. |
Re: How To Make A Budget Plan On Afixed Income by seguno2: 7:59am On Apr 03, 2017 |
tiswell: Yes. Have you heard that saying- cut your coat according to your material? |
Re: How To Make A Budget Plan On Afixed Income by sakalisis(m): 8:05am On Apr 03, 2017 |
Though I encourage saving, My first point of call after collecting my salary is Food, Half of my salary to be precise. |
Re: How To Make A Budget Plan On Afixed Income by tiswell(m): 8:06am On Apr 03, 2017 |
seguno2:How can one cut this kind of '''material'''on a monthly bases in this recession |
Re: How To Make A Budget Plan On Afixed Income by solarview(m): 8:19am On Apr 03, 2017 |
Great one, for those asking for further help, if you are interested you may download this app which I found very helpful in implementing what OP had just enumerated, the truth is that, it's one of my best Android apps so far. "DAILY EXPENSES" Just search for it on Google Play Store. You will be glad you did. Shalom
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Re: How To Make A Budget Plan On Afixed Income by Enoquin(f): 8:25am On Apr 03, 2017 |
On point, I do this every month. I make a budget, then divide the money into various categories, sometimes I even have money left in certain categories from the previous month but not all the time. I even document my daily expenses, it can sometimes be very inconvenient though 1 Like |
Re: How To Make A Budget Plan On Afixed Income by joey150(m): 8:41am On Apr 03, 2017 |
This is a 2014 post.... and it had to be remembered 3 years later when the likes of davido and Otobo news are in short supply . Well good info for those in need. My thriftness and shrewdness is A+ 1 Like |
Re: How To Make A Budget Plan On Afixed Income by seguno2: 10:38am On Apr 03, 2017 |
tiswell: In absolute terms, nothing is impossible. Some things may be more difficult than others. Have a tight plan to improve yourself and earnings legitimately. |
Re: How To Make A Budget Plan On Afixed Income by seguno2: 10:40am On Apr 03, 2017 |
Enoquin: That must be why you are a queen. Lol. |
Re: How To Make A Budget Plan On Afixed Income by seguno2: 10:41am On Apr 03, 2017 |
bofow: Which is where many fail and become dropouts in the most important school- the school of LIFE. |
Re: How To Make A Budget Plan On Afixed Income by Enoquin(f): 12:59pm On Apr 03, 2017 |
seguno2: Hahahaha 1 Like |
Re: How To Make A Budget Plan On Afixed Income by NaijaPress: 9:12am On Oct 20, 2020 |
Budgeting - How To Prepare A Budget - A budget plan is a plan for the future, covering a specific period of time usually a year. A budget should be supported by detailed subsidiary plans about how many employees will be required... |
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