WorkFinance5 Useful Tips To Set A Monthly Budget & Manage Your Expenses

5 Useful Tips To Set A Monthly Budget & Manage Your Expenses

Women have been succeeding in varied roles like leadership, superintendency, corporate citizen, or homemaker. Be it your venture or home, managing monthly expenses is the key to financial security in the long term. However, managing expenses efficiently comes requires a different skill set altogether, one that involves discipline, setting a monthly budget, basic bookkeeping, and being able to take stock of your savings and expenditure. Here is a complete budget management guide for women to get better at managing their finances.

Monthly Budget & Expenditure Management 101

Budgeting simply means spending in check and controlling your expenses. It makes you ready for the age-old question – how to set a monthly budget! And this will not only help you build your wealth but also, help you live your life stress-free. 

Especially during these tough times, when the pandemic and Covid scare has been governing our lifestyle and spending pattern, irrespective of our profession or status. The advice to remain indoors has left all of us re-evaluating our budget strategies! Monthly expenses and planning them efficiently don’t have to be difficult. Setting a monthly budget may sound boring or overwhelming, but in the long run, it can help build up your savings to splurge on more meaningful indulgences and experiences like your own home, a vacation abroad, or a grand wedding.

5 Simple Ways To Manage Your Monthly Expenses

So, what is the right way of planning a budget? There are several tips passed down generations by the women of the family, but not all of them are relevant in today’s day and age. Be it household budgeting or personal budget goals, here are some effective budget management ways.

1. Calculate Your Income

Household budgeting starts by figuring out how much you’re bringing in each month. Add up all reliable sources of income: Wages from a job, venture profits, pensions, shares, mutual funds, and more. If you get cash from outside jobs or hobbies, but not on a regular basis, don’t put the money down as income in your budget. Your budget should be a document you can depend on.

For those who are self-employed or have a fluctuating income, use an average monthly income or an estimate of the income you expect to receive in a particular month.

2. List Your Expenses

How to calculate monthly expenses is a commonly asked question. List all the fixed expenses and the amount of the expense. This includes fixed expenses like mortgage/rent, taxes, EMIs, fees, bills and groceries. Apart from this, you may have variable expenses like festivals, events, shopping, and emergencies. Write the maximum amount you plan to spend in that category or the amount you expect your bill to be.

Review your bank statements to uncover categories of spending you may have missed. For yearly expenses like income tax, make sure you divide it throughout the year so as to not overburden yourself.

3. Total Your Income & Expenses

Calculate your family budget for a month based on your income and expenses. If your income is higher than your expenses, you are doing it right. This extra money means you can put funds towards other areas of your budget, save for the future or invest to gain returns. But if your expenses are more than your income, that means you are overspending and need to make some changes. This means you need to cut down on a few things and replan your monthly expenses.

4. Track Your Spending

Tracking your spending helps you answer the question, ‘How to cut down expenses?’ And it isn’t limited to just when you are overspending but also cut down on unnecessary monthly household expenses. Throughout the month, track your actual spending against what you budgeted. 

Study your observations at the end of the month to determine how to set a monthly budget that makes the best use of your income. It helps you choose your options carefully and also plan possible investments for your future.

5. Plan For The Future

Whether you save money in a gullak (piggy bank) or invest in mutual funds, planning for the future is a must. This makes your life in your senior years a lot easier, helps you with your kid’s education and most importantly, works as a contingency fund in emergencies. Along with monthly budget goals, set long-term wealth goals as well. The best example of the need for such funds is the ongoing pandemic. With unemployment on the rise and hospitals charging a lot for treatments, planning your long-term budget proves beneficial.

Here is a 101 guide on goal investing for you to plan your future.

3 Budget Management Apps To Help You Monitor & Track Expenses

Apps For Expense Tracking

1. Walnut

This is a high-rated app that can help you categorise your spending and split it under various heads like bills, loan EMIs, SIPs, household expenses and groceries. The app also analyses data gleaned from your SMS and email communication to better understand your cash outflows. Walnut is now integrating UPI payment services for direct money transfers between bank accounts. Its features include credit card dues tracking, expense splitting, finding ATMs near you and the ability to customize your categories.

2. Monefy

Monefy has an intuitive and user-friendly design, making it easier and fun to navigate and track your expenses. The app basically shows you your expenses through visually appealing graphs and diagrams making it easier to understand your cash outflows. Additionally, it has many other features like an inbuilt calculator, passcode protection, multi-currency support, and budget mode. It comes with an intuitive and easy-to-use interface that allows you to add new records faster.

3. Fudget

This app is making budgeting easy and simplistic for its users. It allows users to add their monthly budget targets, track expenses and spending on a monthly or weekly basis, easily add and edit budget entries and maintain a list of expenses. Also, it offers many other features. Some features include one-tap adding and editing, flexible budget and expense tracking and a simple interface.

It can be difficult to see that your income and expenses are not quite in sync or that you need to cut down on some things. But knowing where you are is going to make all the difference. As you pay off debts and find more ways to cut expenses, you’ll begin to sense a significant loosening of financial pressure. Soon you’ll be ready to add new categories to your spending plan for things that are beyond the ‘necessity’ category. The sooner you get started, the sooner you’ll be on your way to reaching financial freedom.

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