The secret of managing money well is in planning. Budget is only a plan for spending. It helps to meet necessary expenses and help to afford to buy extras one wants to buy and save. It also helps to avoid over spending. There is no single pattern for spending and saving that suits everyone. Income differs, needs and wants must be taken into account, and expenses differ. This means that each person must make his own plan. Following are some general suggestions for planning your budget.

● ● A budget should eventually be planned to cover expenditures and savings for a year

● ● To get started you can plan month by month. At the end of the first year the records and experience may help to plan more wisely for the next year

● ● First estimate your total income. This includes mortgage or rent payment, electricity, food insurance, loan payment and transport costs

● ● Next keep a record of your expenditures for atleast a month before you start to work out your budget. Such a record will give a picture of how you spend your money and will help you plan your spending

● ● Determine the amount that will be required for fixed expenses. These items include rent, utilities, insurance payments, direct taxes such as property and wage, car payments and other instalment payment. List them and plan how much money to spend for them

● ● Then estimate the cost of other necessary expenses such as food, clothing, transportation, health care and personal care

● ● The remainder of the income must cover all other items in the budget. These are the items that represent a person’s particular interests and desires such as education, recreation, contributions, hobbies, gifts and savings

● ● Do not make the mistake of planning to save money that is left over. It is improbable that anything will be left to save. Plan the amount that you intend to save at the same time you budget all other items

● ● Record your individual budget plan – don’t trust memory

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