9 tips on how to be within your personal finance budget and increase savings


How many of us plan our personal finance budget? Planning of personal finance budget is important for achieving your financial goals. If you are struggling to manage your cash inflow / out flow every month and keep worrying about your future money management, this article is for you.

Budget planning can be done by an individual for his money management, a business man or company for their business. Below is the step-by-step guide on how you plan for your monthly budget.

Personal budget finance, budget planning 

Planning for the monthly budget

  1. Income sources: List down all your income by month, like paycheck, interests, Dividends, Rents or any other source of income. Exclude anything you expect in future like pay rise, or any projected profit from stocks etc., Now the month on month total income listed down would be the maximum limit you are entitled to spend as expenses. Nothing beyond this.
  2. Total expenses



    1. Regular Expenses: Similarly list down all your regular expenses, like rent, groceries, children education, electricity, water etc., These are general expenses which you need to incur irrespective of your level of income. These do not include any luxurious items.
    2. Monthly obligations for Debts / Loans: List down all your monthly obligations for housing loan, car loan etc., These are monthly obligations
    3. Non regular expenses: These are special expenses which you may incur not on regular basis like vacations, restaurant bills etc.,
    4. If you add your regular expenses, monthly obligations and non regular expenses, it would be your total expenses
  3. Your income minus total expenses would be your savings. In case your expenses are more than the income, then you are plan to spedn / spending more than what you are earning. You need to be cautious and reduce any unwanted expenses so that there is no overspending.

Click this link to download the personal monthly budget template (Excel budget template) which provides minute details of expenses which you can plan month on month. This monthly budget template is from Microsoft site.

9 tips on how to be within your personal finance budget and increase savings

  1. Identify your major source of income: If your major source of income (say paycheck as an example) is more than 90% of your total income, you have to be little cautious as you are too dependent on a single source of income. What happens if your major source of income stops from tomorrow? Try increasing other sources of income and reduce the dependency on major income.
  2. Have you ever thought of increasing your total income? There are various best ways on how you can increase your total income like invest in bank fixed or recurring deposits, invest in top performing mutual funds, etc. These add regular income to your portfolio. The regular income we meant here need not be on monthly basis, but they can add up either in Qtrly or yearly basis.
  3. Have you ever thought of taking a help from your family members in increasing your income. There are several ways you make income through online, make money through twitter, make money from small business ideas with low investments etc.,
  4. We all know, Savings = Income minus expenses; But have you heard of the concept Expenses = Income minus savings. This means, spend money after determining what you want to save.
  5. Have you checked ways to reduce your expenses? (Which I explained in one of my previous article). Put up a household monthly budget and be within the limit
  6. Reduce expenses and save money without compromising on the quality of services or product. Pls see my article on the tips I have provided on this topic.
  7. There are ways and means to reduce the insurance costs
  8. If you are doing online shopping, try for online coupon codes / promotional codes to save money
  9. Have you ever tried “expense holiday” for a month. This is a good concept. Starting from the day one of the month to the end of the month, do NOT spend anything beyond your regular monthly expenses.

Conclusion: Money management is an art. Planning for a monthly budget is essential for achieving your financial goals. Don’t be too dependent on major source of income; try various ways to add income to your portfolio. Reduce your expenses so that you would be within your expense budget. Finally, adopt the concept, Expenses = Income minus savings. This means, spend money after determining what you want to save.

Readers, how are you planning your monthly budget? Have you ever tried reducing your expenses and are within your monthly budget?

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Happy Budgeting!!!

Suresh KP

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