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How to plan your monthly expenses


Although the thought of how to plan your monthly expenses may seem intimidating at first, it becomes the first step on the path to financial literacy, successful money management and achieving goals.

It is the control of finances that helps to determine a comfortable monthly budget, that is, one that satisfies your basic needs and desires, without leaving you feeling like you are living an inferior life. When budgeting for 2022, try to be more conscious about spending.

Don’t skimp on the things you really enjoy, but cut back on things that don’t make you happier or improve your quality of life. This will provide a sustainable approach to saving, investing, and help to achieve a more stable financial future.

How to plan your monthly expenses

So what is defined as an expense? In essence, expenses are all the money that goes out, not comes in, this is what you spend finance on. For example, basic necessities such as rent, utility bills, food, medical care. Or is it something less essential: entertainment, travel, cosmetics, etc.

We have monthly income like salary and expenses like rent. This allows you to calculate the budget for the month, which is much easier to manage than the annual one. To make the plan clearer and simpler, break it down into four separate categories:

  1. fixed costs
  2. Investments
  3. Saving
  4. Non-fixed expenses

Fixed Cost Examples

Fixed expenses are something that you cannot refuse. This is something you really cannot live without, and although you cannot avoid such expenses, you can reduce them. They could include:

  1. Housing expenses such as rent or mortgage payments;
  2. Utilities such as electricity, gas and water;
  3. Meals: groceries, takeaways and restaurants;
  4. Transportation: tickets, payment for gasoline and car maintenance, etc.
  5. Internet and cellular communication;
  6. Health care


Investing can help save money that is constantly declining in value due to inflation. While some investments bring better results in the long run, others will bring in money faster. Investment categories include:

  1. Retirement accounts
  2. Bonds, shares
  3. Savings accounts
  4. Currencies

Savings can be used for various purposes: create a savings account for each of the destinations. Possible options:

  1. Fund for unexpected expenses, such as medical care or computer repair
  2. Major purchases, such as a down payment on a house or car
  3. Scheduled expenses such as car maintenance

Non-fixed expenses

Once you’ve taken care of the previous categories, you’re left with money that you can spend guilt-free. This is something that makes you happy, improves the quality of life, but it is not necessary. This is, for example:

  1. clothing
  2. Dinners in restaurants
  3. Trips
  4. Visits to cinemas, museums, theaters
  5. Subscriptions to additional services

How to plan your monthly expenses

How to plan your monthly expenses

You don’t need a personal manager or a complicated calculator for this: start with a simple list of all the expenses you have every month. Use simple apps to keep track of your spending if you’re unsure about your memory. Another option is to simply look at the payment history on your bank card. Then divide the expenses into the categories described above.

Decide what the percentage will be between the categories. For example, some people adhere to the 50/20/30 rule: 50% of monthly income goes to mandatory expenses, 20% to pay off debts or savings, and the remaining 30% to everything else.

After you have finished with the classification and proportions, complete the plan in detail. For example, your household income is 100,000 🪙 per month after taxes. You can:

  • 50%, that is, 50,000 🪙 to spend on mandatory expenses,
  • 10%, that is, 10,000 🪙 to spend on paying off debts,
  • 20%, i.e. 20,000 🪙 to invest,
  • 20%, that is, 20,000 🪙 to spend on what you want.

Keep in mind that your spending plan may change. For example, you get a new position and, accordingly, earn more. Or vice versa, if you have to borrow money, you will have to take into account that the debt needs to be repaid.

When you’re planning your monthly expenses, it’s helpful to understand why you’re spending money the way you do. Try to make sure that what you earn goes to something that gives you positive emotions, whether it’s a trip or a weekend at the spa.

For example, if you enjoy fitness, a gym membership is a good way to spend money. If you have kids but want to go somewhere without them from time to time, paying a babysitter is a great investment. The bottom line is to not deny yourself what you love. The key to success is a structured approach – instead of just limiting yourself, try to simply organize your finances better. This will help get rid of the fears associated with money, which usually make financial decisions even more difficult.

Post source: kakzarabotat.net

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