Budgeting = An Enjoyable Life

Budgeting = An Enjoyable Life

How much money is in your bank account right now? Do you save money every month or do you spend all of your money?


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How much money is in your bank account right now? Do you save money every month or do you spend all of your money?

Life can be very expensive. There are many things that cost a lot of money. Some of these things are necessary. Some of the things we spend money on are unnecessary. However, keeping track of your spending will help you save money. Tracking your spending will also make you a smarter shopper.

How to Make a Budget

1.    Know how much money you earn every month.
2.     Find out what 25% of your earnings is. Your housing should not be more expensive than 25% of your monthly earnings. This is your housing budget.
3.    Calculate all of your required spending. This includes car payments, insurance, gas, Internet, and electricity or gas bills. Also include anything you must spend every month. ( Student loans are a good example.)

Monthly income - 25% for housing  =  Monthly spending money

Monthly spending money - Required payments = Spendable income

4.    Find 15% of your spendable income total. This is how much money you should save each month. Do not spend this money! Deposit this much or more into a savings account every payday. Make your savings a priority.
5.    Use your new number of available money to determine how much money you can spend on things like food, travel, and entertainment. Do no spend more than this number each month.

Making a budget is extremely important. It is vital to monitor your spending so that you can pay all of your bills, build a savings, and enjoy life. It's not fun feeling like you have to pinch pennies to survive. Budgets will help you feel like you have plenty of money each month.

Building a Savings

It's usually free to open a savings account at a bank. After you open an account you can set your checking account to make a monthly automatic deposit. This means that your checking account will give money to your saving account every month. You can build a savings effortlessly! Avoid taking money out of your savings and you can watch your savings grow!

$100 monthly = $1,200 annually
After 5 years of savings, you will have $6,000 in your savings account!

Does it sound too good to be true?

Not everyone will be able to acquire $6,000 in five years. Sometimes budgets have special changes. In other words, a person might need to withdraw money for an emergency or to make a large purchase. That's okay! After all, that's why you saved up money, right?

Special Savings for a Special Budget

There might be something special that you want to do or buy. Maybe you want to buy a car or go on a long and exciting holiday somewhere special. These things cost a lot of money. You can afford purchasing these big-ticket items without destroying your savings! Here's how you do it: backwards planning.

First, plan how much money you need to buy this thing you really want. Second, study how many months you have until you will buy this expensive thing. That's how much money you need to save every month to afford it.  

Estimated cost  ÷ # of months until your trip = Monthly savings you need

For Example:

You want to go on a trip to the United States in one year. Your estimated cost is $3,000.

$3,000 ÷ 12 = $250

You should try to save $250 per month before your trip.

Budgets are not very exciting, but they are vital. Budgets will help you enjoy life on a shoestring budget. Now you know how much money you can spend on things. Plus, you can save money!