1 . We set ourselves a goal. All the same: trips, family holidays, special projects, home, baby, etc. Our goal will motivate us to closely monitor our financial situation throughout the year.
2 . We evaluate fixed costs: rent, car, electricity, telephone, internet, insurance, mobile phone, public transport, loans… Although we have to pay these costs regularly, these costs can fluctuate in general. Year after year. Therefore, we are considering requesting a quote elsewhere or renegotiating with our suppliers.
3 . We evaluate variable costs: groceries, clothing, school supplies, leisure… These are the expenses we have to cut if our budget is broken. For example, cooking more food and buying less fast food, taking advantage of shop sales, etc.
4 . We estimate the annual costs: registrations, car maintenance, taxes, medical examinations (dentist and optometrist).
5 . We continue to enjoy life! Actually, it is not because we are making a budget to forget the pleasures of life. Whether it’s a monthly dinner in the restaurant, a visit to an all-season beautician, or a 5-7 weekly visit with our colleagues, we fit into our budget. Want to pamper yourself with some luxury (weekend at a spa, big purchase, etc)? We determine the cost, then divide by 12 to set an amount of money to allocate each month.
6 . Unpredictable … Unpredictable! How? ‘Or’ What? Leaving aside the sum of our annual expenses – ideally it is multiplied by three. Thus, if something unexpected happens, the rent will still be paid using this working capital.
7 . Before we start to save, we will refund the remaining balance of our credit card and stores, if any. If you have more than one balance to pay off, debt consolidation may be considered at a more favorable rate. We receive information from an ACEF or our financial institution.
8 . We avoid seeing the loan as financial security. We must change our mindset and buy within our means.
9 . We protect our savings! If you are afraid of spending the saved money, you can invest it in a savings account that is difficult to withdraw or in a closed investment for a certain period of time.
10 . We use a budget chart.
The 50-20-30 (or 50-30-20) budget rule is an intuitive and simple plan to help people reach their financial goals. The rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-do.
Budgeting. At the very basic level of personal finance, you should understand the need for, and value of, a budget. A budget or spending plan is a road map for telling your money what to do each month. At its simplest, a budget lists how much income you have coming in compared to what's going out each month.
Basic financial planning can be covered in five simple blocks: Savings, investment, tax planning, medical expenses and life protection.
Pay yourself first. This is an old rule of thumb that helps you save, rather than spending all your money. Even if your budget is tight, as soon as you get paid, put some money into savings.
The next 20% of your budget goes to long-term savings and extra payments on any debt you may have. For example, this bucket would include contributions to your 401(k) or IRA. And if you're trying to become debt-free, the extra debt payments would go into that budget.