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How to Budget Your Money Wisely

Working with a budget happens to be hard for a lot of people. It connotes restriction and challenges an individual to keep his spending pattern at a certain level. However, by taking a good look at it, a financial budget is simply a guide about how one spends his money wisely, and having saved some, has more to spend in the future.

Developing a budget happens to be a challenge for most people. It connotes restriction and challenges a person to keep his spending pattern at a certain level. However, by taking a good look at it, a budget is simply a guide regarding how one spends his money wisely, and having saved some, has more to spend in the future.

So, how can you budget your finances efficiently? These are the points that financial planners have to say:

1. Jot it down.

List down on paper all your monthly earnings less taxes and government contributions. This can enable you to understand how much monthly income you have so its possible to focus and be directed about how much you can spend and save.

2. List down your expenses.

The expenses that you should identify and list down here are your basic needs or perhaps the ones you can't live without. These are generally living expenses that will include food, utilities, mortgages and rent, if any, and transportation.

3. Allocate your earnings.This is basically the most essential as you have to apportion your earnings to your expenses. It's here that you choose which matter most for you.
A highly respected registered financial planner recommends that one needs to allocate his income into 60% necessities, 20% savings and investments, and 20% wants.

As previously discussed, the Necessity Expenses are your living expenses. Keeping it at 50%-60% of earnings will permit more room for savings, investments, as well as others.

- Funds for Savings and Investment
Put aside a percentage of your earnings for investments that could bring on passive income at some point. Such investments might be through stocks, mutual funds, bonds, government securities, as well as others.You might also decide to use a part of this fund to setup an emergency savings account to deal with emergency cases like hospitalization, house repairs, and expenses during calamities.

- Funds to Pay Debts

This fund can also be used for paying debts or credit cards or could possibly be allotted to purchase a car, buy a gadget, or for travel.

- Funds for Life Insurance and Health/Medical Insurance

It is best to have a life insurance if the inevitable happens. Having none will make your family members suffer and may eventually be in insurmountable debt.

If you do not have any life insurance cover but would wish to invest since the stock market is bullish, you could possibly consider buying an investment-linked life insurance policy. This is an insurance policy which provides life insurance as well as an investment feature which allows your money to grow.
Getting a health/medical insurance is essential. If you've found yourself seriously ill just like having a stroke or cancer and you simply don't have any health insurance, your loved ones will definitely be heavily indebted and be in a lifetime of financial difficulties. Thus, having a health/medical insurance will unburden your family of any financial obligation.

- Funds for Education

Investing in education can provide better opportunities later in life. Buying books and attending training/seminars for self development will further your competency and increase your earnings.

- Funds for the Church and Loved Ones

This fund would not only include tithes and offerings to the church, but once parents, siblings, relatives, and friends need your financial help. Always bear in mind that giving financial aid must be prior to your available resources.

- Funds for Self Indulgence and Relaxation
Use a separate fund for yourself indulgence and relaxation. This may be used to have coffee with friends, go shopping, pamper yourself by having a massage, or something that you want to have.

4. Implement the Budget Plan
When important things have been laid out, it is time to implement your budget plan. Ensure that the monthly funds for necessities and self indulgence and relaxation are the only funds that you have staying with you. Others should be kept in labeled jars or envelopes. This can be hard at first, but in due time, it will become a routine. It's just a matter of self-discipline.
Which means you better start possessing a budget plan. It allows you to take hold of your money, prioritize things, and in the end leads you to attain financial freedomFree Reprint Articles, something most of the people desperately wished to have.


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New York based founder of Philippine Virtual Assistant Network - Philippines largest community of Filipino Virtual Assistants with more than 13,000 members. He also founded PVAN Academy, VA Internship Program & Web Internship Program, an online learning & personalized mentoring website that caters aspiring virtual professional & web designers to work from home. Likewise Jay is also the Principal of Remote Virtual Assistant Agency, a virtual assistant staffing agency which helps several Filipinos to have a work from home job which currently serves several clients around the globe. As an author, he published Be a Rockstar Virtual Assistant | The Ultimate Guide in Working Online. on to help aspiring virtual assistant to work from home Follow him on Twitter, Connect with him on Facebook, Linkedin or visit his personal website

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