A monthly budget plan comes with great benefits

A monthly budget plan is something no one should overlook the benefit of doing it. Most people assume it’s too overwhelming or too restrictive to track their spending, but it’s the opposite. A personal financial planning or finances tracker is like a map leading you in the right direction of your financial journey success. Without a map, you’d get lost. Your money feels the same way.

Why you Should have a Monthly Budget Planner and Track Spending

You may think if you make enough money to cover your bills and “fun” spending each month you don’t need a monthly budget planner. But you do need to track your finances. In fact, everyone does no matter how much money they make.

Here’s why.

If you just spend your money without a plan, you’re not thinking of the future. Personal financial planning helps you put money where it needs to go, including areas that aren’t for immediate spending. Think of things like:

  • Emergency savings accounts to cover three to six months of expenses should you lose your job or fall ill
  • Rainy day accounts to cover unexpected expenses, like car repairs, house repairs, or medical bills
  • Retirement accounts to help you enjoy your golden years without worrying about money
  • Goal accounts to help you save for your goals, like a dream vacation, buying a home, or paying for college
How to Budget your Spending

It’s not enough to say you’ll budget your spending, you have to know how to do it. There’s no right or wrong way to handle money management, but any of the following methods help keep you organized:

  • 50/30/20 budget as personal financial planning

This budget allocates 50% of your income to your fixed expenses (housing, utilities, taxes, insurance, etc.), 30% to your variable expenses or unnecessary expenses, such as unlimited data plans, clothes beyond the basic needs, TV streaming, and entertainment, and 20% to your savings and/or debt payoff.

This method gives every dollar a ‘job.’ At the end of the month, you should be left with $0 in your account, not because you’re broke, but because you allocated every dollar you brought in to an expense or fund, including your emergency savings or retirement accounts.

  • Envelope budget as personal financial planning

This budget allocates a certain amount of money to each expense category, such as housing, transportation, utilities, groceries, entertainment, and shopping. It works best with the categories you spend cash on and tend to go over budget. When you spend the cash in the envelope, that’s it for the month — you can’t spend any more until next month. Some budgets app allow you for instance to execute the envelope budget the perfect way using your smartphone.

Track your Financial Budget

The key to wrapping it all up is tracking your financial budget. You can say you’ll budget and try your best, but if you don’t track how you’re doing, you won’t know where you should make changes. Tracking your budget spending is the key to a successful budget.

To make a monthly budget plan, whether you track your personal finances with pen and paper, a spreadsheet, or an easy-to-use mobile app, you’ll be on your way to successfully creating and using a budget. Consistency is key when budgeting. Start today and see how easy it is to manage your personal finances.

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