How to budget for salary?

yousef14 July 2022Last Update : 2 years ago
How to budget for salary?

To make a person’s budget, the following steps can be followed:

Initial steps

Determining income: This is by knowing how much money a person receives each month, and if he has a variable income, he must put an average for it to be able to know how the money is spent.

Determining fixed expenses: they are the expenses that do not change from month to month, such as: House rent, car installments, electricity bill, bank loans and more.

Determining variable expenses: These include groceries, eating out, clothing and entertainment, and they are called variable because they can be reduced from month to month.

steps during the month

Comparing expenses to income: To create an ideal budget, outgoings must match income; If a person spends every dollar of income in a particular place equal to a dollar, this is called a “zero-dollar budget,” and if the income does not match the expenses, the person needs to adjust the budget according to the salary; By reducing variable expenses, and if a person has additional money at the end of the month, he can put it in the savings section, and if he reduces variable expenses significantly, but the income is not yet enough to meet the fixed expenses, then he has to find solutions to change the fixed expenses, and he can also search for additional work or work New better.

Expenditure follow-up: This is to keep expenses under control and to prevent any excess expenses.

Budget Reset: A person may need to change the budget when unexpected expenses arise; He may need to take out clothing expenses, for example, to repair a car breakdown.

Budget assessment: This stage comes at the end of the month; So that the individual may change or alter the budget according to what suits him.

Maintaining the budget

To maintain the budget, the following tips can be followed: Focus on the principle of prevention is better than cure; In order to save the expenses of repairing faults. Saving from income is 5% or the proportion that suits the situation of the individual, and the amount can be increased more as the person acquires more experience in managing the budget. Practicing re-arranging funds from month to month to meet any emergency circumstances or confrontations, without the need to resort to the provident fund; For example, if someone wants to buy a new TV, he should reduce eating outside the home.

Ensure that expenses are always less than income, and this does not mean deprivation; Rather, it means managing money in the right way so that money is put in its rightful place, and spending is reduced from something less important to something else that is more important.

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