A personal budget serves as a financial roadmap, guiding how you allocate your income towards expenses, savings, and debt repayments. Contrary to the misconception of restriction, it’s a liberating tool that empowers guilt-free spending, knowing your expenses are accounted for. Here’s how to prepare your personal budget:
- Start with a Template: Utilise an Excel spreadsheet, an app, or a website to create a 12-month budget plan. Break down all income and expenses on a monthly basis. Consider using a complimentary Personal Budget template available to our clients.
- Income: Include all sources of income such as business drawings, salary/wages, interest, dividends, and rental income. Calculate monthly averages for weekly or fortnightly income to ensure accuracy.
- Expenses: Categorise expenses into key areas like household, food, apparel, children, medical, insurance, transport, lifestyle, and debt repayment. Allocate irregular expenses like annual rates or insurance payments to the month they occur to plan for variations in monthly spending.
- Monthly Cash Summary: Display your cash surplus or deficit for each month and the entire year. If facing a deficit, review expenses to identify areas for reduction.
- Actual vs. Budget: Regularly compare actual monthly spending to budgeted amounts. Dedicate time monthly to input actual figures and adjust the budget as needed for the remaining months.
Your budget should align with your family’s goals, whether it’s reducing debt, funding a family holiday, or achieving other financial milestones. Understanding your spending habits and setting personal wealth goals are crucial steps towards financial control and reduced stress.
Contact us for a copy of our Personal Budgeting Template to kickstart your spending plan and work towards your financial objectives.
